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STRAIGHT    BUSINESS 
IN    SOUTH    AMERICA 


BY 


JAMES  H.  COLLINS 


D.  APPLETON  AND  COMPANY 
NEW  YORK  LONDON 

1920 


C6' 


COPYRIGHT,    1920,    BY 

D.  APPLETON  AND  COMPANY 


•  •  ••♦,  •  „..'''      •     • 


PRINTED  W  THE  UNITED  STATES  OP  AMERICA 


TO 
CYRUS  H.  K.  CURTIS 

The  final  story  growing  out 
of  one  of  his  far-sighted  and 
most  interesting  assignments 


PKEFACE 

Most  of  our  literature  on  South  America  is  either 
rigidly  practical  or  exuberantly  optimistic.  Official 
bulletins  and  technical  works  tell  the  business  man  how 
to  sell  goods  on  the  Southern  continent,  but  overlook 
other  aspects  of  trade,  such  as  buying,  investments  and 
the  development  of  South  American  resources.  Books 
of  travel  and  diplomatic  propaganda  exhibit  our  South- 
ern neighbors  to  the  best  possible  advantage,  but  ignore 
hard  facts  with  which  the  business  man  must  deal,  and 
which  usually  astonish  him  when  he  visits  the  South- 
ern continent. 

An  effort  has  been  made  in  this  volume  to  tell  the 
truth  as  our  business  men  see  it  when  they  investigate 
for  themselves.  The  truth  is  not  always  pleasant,  but 
it  can  be  told  constructively,  pointing  out  to  Americans 
seeking  business  among  our  Latin  neighbors  their  op- 
portunities to  assist  in  improving  conditions. 

Should  tlie  work  interest  Latin  Americans,  they  are 
asked  to  bear  this  in  mind:  Such  a  book  must  neces- 
sarily be  written  from  the  national  viewpoint  of  the 
visitor  to  their  countries,  and  in  this  case  the  visitor 
has  been  concerned  chiefly  with  correcting  business 
faults  and  harmful  conceptions  of  South  Americans 
among  business  men  of  his  own  country.  What  may 
appear  like  criticism  really  amounts  to  a  generous  dis- 


viii  PKEFACE 

count  off  the  fanciful  l^orth  American  conception  of 
South  America.  When  the  l^orth  American  business 
man  finally  knows  that  emeralds  do  not  hang  on  the 
trees  along  the  Avenida  Eio  Branco,  and  that  the  Ave- 
nida  de  Mayo  is  not  paved  with  gold,  then  many  of  the 
difficulties  in  business  between  the  two  continents  will 
disappear.  Should  sensibilities  still  be  touched,  let  the 
Latin  reader  remember  that  every  book  of  this  kind 
must  appear,  to  readers  in  the  countries  dealt  with, 
like  the  distorted  suggestion  of  a  pattern  on  the  under- 
side of  the  tapestry — ^the  real  pattern  appears  to  the 
audience  for  whom  it  was  written. 

"South  America"  and  "Latin  America"  are  both 
used  in  the  text.  The  material,  however,  has  been 
drawn  entirely  from  -SiYe  South  American  countries — 
Argentina,  Brazil,  Chile,  Uruguay  and  Peru.  A  visit 
to  these  countries  naturally  gives  warrant  for  deduc- 
ing some  general  Latin- American  traits^ — ^but  not  all! 
The  reader  will  please  regard  the  book  as  a  view  of 
Latin  America  from  the  South  American  standpoint. 

The  book  grew  out  of  a  series  of  articles  written  for 
the  Philadelphia  Public  Ledger,  during  an  eight 
months'  tour  of  the  major  South  American  countries. 
It  is  a  rearrangement  of  material  aggregating  a  quar- 
ter-million words,  and  also  embodies  conclusions 
formed  after  the  leading  Latin  republics  had  been 
studied. 

The  author's  thanks  are  due  to  the  Philadelphia 
Public  Ledger  for  permission  to  use  material  as  well 
as  to  Printer  s  hik,  Successful  BanMng,  the  Country 
Gentleman  and  the  N'ew  York  Tribune,  in  which  pub- 


PKEFACE  ix 

lications  some  of  tlie  material  has  also  appeared  in 
different  form. 

Credit  is  due  for  the  historical  material  in  Chapter 
XIX  to  William  Spence  Eobertson's  excellent  Rise  of 
the  Spanish- American  Republics,  to  Alfred  Coester's 
Literary  History  of  Spanish  America,  and  for  Bra- 
zilian historical  material  to  Senhor  Manoel  Bomfim, 
the  eminent  Brazilian  educator  and  scholar. 

Thanks  and  appreciation  should  also  be  expressed 
to  John  Barrett,  former  Director-General  of  the  Pan- 
American  Union,  for  his  personal  interest  and  as- 
sistance; to  the  officials  of  the  Xational  City  Bank  of 
!N'ew  York  in  South  America  for  teamwork,  and  to  the 
United  States  Trade  Commissioners  there;  to  Messrs. 
George  Ethridge  and  W.  Livingston  Larned  for  point- 
ing out  the  need  for  such  an  investigation;  to  the  ex- 
ecutive of  a  large  world-trade  corporation,  who,  through 
modesty,  does  not  wish  to  he  named,  hut  who  kindly 
read  the  manuscript  and  made  valuable  technical  sug- 
gestions. Finally,  an  author's  inevitable  wife  must 
not  be  overlooked — Mrs.  Collins,  in  addition  to  all  the 
secretarial  work  during  an  eight  months'  trip,  with 
rather  better  than  an  article  to  be  written  every  other 
day,  and  steamship  trips  averaging  a  week  in  between, 
also  contributed  a  factor  that  many  a  business  man 
would  find  invaluable  in  studying  Latin-American  pos- 
sibilities— the  viewpoint  of  a  woman. 

James  H.   Collins. 

New  York. 


CONTENTS 

CHAPTER  PAGB 

I.    Wanted — Business  Imagination  for  Export      .  1 

II.    What  South  America  is  Like 17 

III.  What  the  People  and  the  Countries  are  Like  31 

IV.  The  Tools  of  the  Trade — Our  Own  Banks      .  54 
V.    The  Tools  of  the  Trade — Olti  Own  Ships  .      .  69 

VI.    The  Tools  of  the  Trade — Investments       .      .  79 

VII.     The  Tools  -of  the  Trade — Distribution  ...  90 

VIII.    The  Tools  of  the  Trade — American  Retailing  101 
IX.    The  Tools  of  the  Trade — American  Ck)NSUMEB 

Advertising 113 

X.    Doing  Business  with  South  America     .      .      .  127 
XI.    Why  South  America  Needs  Continental  Meth- 
ods        148 

XII.    The  Other  Fellow — Our  Competitor      .      .      .  160 

XIII.  What  Do  South  Americans  Think  About  Yan- 

kees!    175 

XIV.  The  Importance  of  Buying  as  Well  as  Selling  187 
XV.    About  "Picking  Up"  the  Spanish  Language  .  199 

XVI.    What  Chance  for  Me  in  South  America     .      .  213 

XVII.    What  You  Will  Need  in  South  America  .      .  224 

XVIII.    The  South  American  Farmer 239 

XIX.    Who  Was  Who  in  South  America— Paragraphs 

of   History 250 

XX.    The  Canal  Zone— A  Sample  of  Us  .      .      .      .  269 

Index 287 


XI 


*, :»  \  •  »•;  ••,»  » *•% 


STRAIGHT  BUSINESS 
IN  SOUTH  AMERICA 

CHAPTER  I 

WANTED— BUSINESS  IMAGINATION  FOR  EXPORT 

It  was  the  Old  Man  himself  who  discovered  South 
America,  and  fell  in  love  with  the  continent  as  a  market 
for  the  surplus  output  the  company  must  reckon  with 
three  years  hence. 

A  week  of  conferences  followed.  Branch  managers 
were  hurriedly  summoned  from  points  as  far  as  St. 
Louis.  Those  who  could  not  reach  the  home  office  in 
time  were  consulted  by  wire. 

^^See  that  they  get  complete  stenogi-aphic  reports  each 
dav,"  directed  the  Old  Man.  ''We  want  their  criti- 
cisms.     If  we  are  going  to  do  this  thing  at  all,  let's  do 

it  right.'' 

The  conferences  were  almost  revivalistic.  Nobody 
could  be  seen  during  the  sessions,  nor  anything  disr 
cussed  but  South  America.  New  discoveries  were  made 
daily  as  they  sat  under  the  spell  of  its  romance,  its 
historic  past,  its  inevitable  future. 

"Do  you  realize  that  Brazil  alone  is  larger  than  the 
Unit€d  States  ?"  asked  the  Buffalo  manager. 

"Not  only  that,"  chimed  in  the  sales  director,  "it  has 

1 


2        /-m^Sli^E^S  IN:  SOtJTH  AMEKICA 

one  of  the  few  great  undeveloped  cattle  regions  left  on 
the  globe/' 

^^Cuba  buys  more  paint  per  capita  from  the  United 
States  than  any  other  country,"  announced  the  purchas- 
ing agent. 

''Is  that  so  ?"  exclaimed  the  Old  Man.  "More  paint ! 
!N'ow,  I  never  knew  that!" 

The  new  Director  of  Sales  for  South  America  told 
them  many  illuminating  facts  about  the  Latin  republics. 
He  was  a  capable  young  fellow  who  had  been  dug  out 
of  the  organization  of  an  export  house.  He  had  never 
been  to  South  America,  but  had  fitted  himself  by  study- 
ing Spanish  and  handling  important  correspondence 
with  Latin  American  houses.  So  he  had  friends  there 
already,  and  his  imagination  was  stirred  by  the  possi- 
bilities in  ^  developing  this  new  territory,  for  himself 
as  well  as  the  company.  His  pronunciation  of  Spanish 
terms  awed  the  gathering  and  gave  color  to  the  discus- 
sions. Everybody  offered  him  suggestions,  which  the 
Old  Man  insisted  should  all  be  written  out. 

They  wound  up  Saturday  night  with  a  dinner  at  the 
club.  Flags  of  the  twenty  Latin  American  Republics 
hung  round  the  room,  the  first  time  any  one  there  had 
seen  them.  A  pianist  played  the  national  hymns  of  the 
different  republics,  which  were  also  strange.  The  chef 
composed  a  South  American  menu,  which  included : 

Chile  con  came. 

Arroz  con  polio. 

Ensalade  de  avocado. 

Pasta  de  guayaba  y  queso  de  crema. 


WANTED— BUSIOT:SS  IMAGINATION       3 

To  be  sure,  the  dishes  did  not  reach  beyond  Mexico  and 
Cuba,  but  it  was  a  delightful  affair,  and  everybody 
felt  the  romance  c  l  South  America.^ 

Three  months  later  the  young  man  from  the  export 
house  found  himself  cooling  his  heels  in  Eio  de  Ja- 
neiro, with  the  status  of  a  Legal  Nobody.  (The  Legal 
Nobody  is  something  in  natural  history  which  must  be 

*For  his  South  American  dinner  the  chef  might  have  served  a 
"puchero,"  a  Spanish  dish  widely  popular  on  the  Southern 
continent. 

"Puchero"  is  the  name  of  the  glazed  earthen  pot  in  which 
the  dish  is  cooked,  and  applies  also  to  the  delicacy  itself. 

It  is  a  sort  of  boiled  dinner  a  la  Espanol,  no  more  difficult  to 
prepare  than  New  England's  staple  dish,  simply  having  more  in- 
gredients, and  being  cooked  longer  and  more  slowly. 

A  good-sized  earthen  casserole  makes  an  excellent  puchero,  or 
any  pot  will  do.    You  start  with  a  cut  of  boiling  beef  or  mutton, 
or  a  plump  hen  that  will  boil  tender.     That  is  the  foundation. 
Put  it  in  the  casserole  and  add: 
Whole  cabbage. 
Some  slices  of  salt  pork. 

Some  half -inch  cuts  of  hard  sausage — salami  with  the  casing 
peeled  will  approximate  the  special  Spanish  sausage  used  for 
puchero. 

Some  one-inch  cuts  of  soft  liver  sausage  with  the  casing 
left  on. 

Peeled  Irish  potatoes. 
Peeled  sweet  potatoes. 
Turnips. 
Carrots. 

Spanish  chick-peas  (garbanzos). 
Slices  of  winter  squash. 
Cuts  of  peeled  banana,  preferably  green. 
Some  cooks  add  rice,   green  peas,  lima  beans,  slices  of  green 
corn  on  the  cob, — annatto,  for  coloring — there  are  as  many  kinds 
of  puchero  as  there  are  seasons  and  localities  in  Spain.     The  chief 
point    is    to    put   in   everything    available,    and    plenty    of    that. 
Quantities  are  gauged   so  that  each  person  to   be  served  gets  a 
portion  of  each  ingredient.     None  but  the  heartiest  appetites  will 
come  back  for  a  second  helping. 

Put  the  meats,  cabbage,  carrots  and  turnips  in  the  casserole 
or  pot  first,  and  stew  them  gently  for  one  hour.  Add  the  other 
ingredients  and  simmer  until  tender.  Serve  on  a  big  trencher  so 
the  different  ingredients  can  be  seen  and  served  easily,  one  of  each 
thing  to  the  plateful. 


4:  BUSINESS  IN  SOUTH  AMEEICA 

described  later — it  is  better  to  see  than  be  one.)  He 
had  made  a  very  creditable  start  in  Brazil.  His  Span- 
ish helped  him  acquire  some  of  the  more  difficult  Portu- 
guese. He  had  found  customers  and  made  a  deal  with 
a  live  import  representative.  But  the  home  office  in 
the  United  States  had  evidently  forgotten  him.  He 
could  not  get  orders  confirmed,  or  information,  or  neces- 
sary documents.  His  letters  and  cables  were  unan- 
swered— the  only  message  he  bad  received  was  to  the 
effect  that  owing  to  shortages  no  goods  could  be  spared 
for  South  America  that  year. 

This  picture  may  seem  fanciful,  but  it  fairly  repre- 
sents the  way  in  which  many  American  concerns  em- 
bark in  Latin  American  trade,  and  what  happens  after- 
wards. Hundreds  of  American  salesmen  and  repre- 
sentatives on  the  Southern  continent  will  confirm  it — 
indeed  the  picture  has  been  composed  from  their  experi- 
ences and  troubles.  It  is  so  much  the  outstanding  fea- 
ture of  our  new  commercial  interest  in  Latin  America 
that  the  writer  believes  it  is  the  thing  to  begin  with, 
and  put  before  American  business  men  in  strong  terms, 
to  see  what  can  be  done  to  correct  it. 

That  any  one  should  be  romantic,  but  lack  imagina- 
tion, sounds  like  Chesterton.  Yet  that  seems  to  be  the 
paradoxical  state  of  many  American  business  men. 

If  their  thoughts  turn  to  Latin  America  they  picture 
it  romantically,  the  remoteness,  the  conquistadors,  the 
palms,  parrots  and  pirates,  regarding  the  whole  con- 
tinent with  the  eyes  of  an  adventure-loving  boy. 

But  Latin  America  is  not  one  great  Spanish  Main. 


WANTED— BUSI]SrESS  IMAGINATION        5 

It  is  a  complex.  Romance  may  blind  the  eyes  to  facts. 
Not  clearly  visualizing  the  Southern  continent,  with  its 
diversified  peoples  and  climates,  the  business  man  soon 
loses  interest,  fails  to  back  up  his  representatives,  for- 
gets all  about  the  potential  market  like  a  tale  that  he 
read  somewhere.  Bluntly,  he  is  splendid  when  he  starts 
things  in  that  quarter  of  the  world,  but  the  Briton, 
German,  Italian,  Frenchman  and  Spaniard  beat  him  in 
at  the  finish  because  they  stick,  and  he  doesn't. 

Let  us  examine  this  business  romanticist  a  little  fur- 
ther. It  will  be  interesting  and  profitable  to  get  at 
the  bottom  of  him. 

There  is  his  one-sided  way  of  speaking  about,  and 
thinking  of,  and  seeking  only  export  trade — usually 
termed  "foreign''  trade.  In  this  he  is  not  alone,  how- 
ever. It  is  one  of  our  national  characteristics.  The 
statisticians  at  Washington  constantly  dwell  upon  our 
favorable  export  balances  as  an  indication  of  pros- 
perity, or  wise  administration,  or  something  praisewor- 
thy, even  though  these  balances  are  largely  fictitious, 
the  difference  between  valuations  of  imports  and  ex- 
ports. 

Now,  it  is  an  interesting  fact  that  the  nations  who 
have  to  live  by  exporting  industrial  products,  and  who 
are  best  organized  for  it,  hardly  ever  consider  exports 
by  themselves.  They  lump  in  imports  with  exports,  and 
become  either  happy  or  gloomy  about  their  external 
trade,  as  last  year's  figures  happened  to  go.  Read  John 
Bull's  external  trade  figures,  and  you  will  find  him 
pleased  or  downhearted  about  the  grand  total  of  raw  ma- 
terials   received     and    manufactured    goods    shipped 


6  BUSINESS  IN  SOUTH  AMEEICA 

abroad,  and  taking  the  aggi'egate  as  a  measure  of  prosr 
perity,  as  we  might  take  our  aggregate  bank  clearings. 

When  you  lump  the  imports  in  with  the  exports,  you 
see  that  selling  our  products  is  not  the  whole  of  this^ 
Latin  American  business.  If  people  are  going  to  buy 
from  us  they  must  have  money,  and  they  get  money  by 
selling  their  own  products.     The  thing  is  reciprocal. 

^'Imports  are  necessary  not  only  to  pay  for  exports," 
says  a  ISTew  York  merchant  with  years  of  experience  in 
world  trade,  ^'but  are  indispensable  to  any  industrial 
power.  The  more  diversified  the  industry  of  a  country, 
the  more  certain  it  is  to  require  imported  raw  material. 
The  steel,  leather,  textile,  explosive  and  fertilizer  indus- 
tries of  the  United  States  are  but  a  few  of  those  to  which 
South  American  materials  are  indispensable,  or  nearly 
so." 

Every  time  we  sell  a  dollar's  worth  of  thumb  tacks, 
or  cheese,  or  barbed  wire  to  Latin  America,  either  we 
ourselves,  or  a  Britisher,  or  an  Italian,  must  buy  a  dol- 
lar's worth  of  wool,  wheat,  beef,  coffee,  chocolate,  rub- 
ber or  vegetable  ivory. 

And,  lo !  the  figures  show  that  we  do  buy  a  dollar's 
worth,  and  better.  Taking  a  normal  year  like  1913 ;  we 
sold  Latin  America  $330,000,000  worth  of  goods,  and 
purchased  $477,000,000  worth  in  return.  During  fis- 
cal 1918  we  sold  the  ten  South  American  countries 
$307,000,000  worth,  buying  back  from  them  nearly 
twice  as  much,  $565,000,000,  and  to  the  ten  Central 
American  countries  $411,000,000  worth  of  goods,  tak- 
ing $457,000,000  worth  of  their  products. 

We  have  a  comprehensive  technical  literature  on 


WAISTTED— BUSINESS  IMAGINATION"       7 

Latin  America,  but  it  deals  almost  entirely  with  export- 
ing, faithfully  reflecting  our  way  of  thinking  about  these 
neighboring  countries — that  we  hope  to  sell  them  some- 
thing, but  have  not  paid  much  attention  to  the  things 
they  may  have  to  sell. 

Yet  all  the  while  we  are  buying  their  products.  We 
spend  more  money  in  Latin  America  than  any  other 
country,  taking  over  one  third  of  all  the  products  of 
the  twenty  republics. 

The  American  business  man  who  looks  to  Latin 
America  for  a  market  is  different  from  the  American 
business  man  who  buys  Latin  America's  products.  The 
first  is  a  romanticist  and  the  second  a  hard-headed 
realist. 

The  seller  is  a  manufacturer,  a  salesman,  a  creator 
of  commodities,  conveniences,  comforts,  a  stimulator  of 
demand  through  advertising  and  distribution.  In  busi- 
ness, he  has  dreamed  dreams  and  seen  them  come  true. 
Imagination  enters  into  all  his  work  and  plans  at  home. 
He  is  not  afraid  to  build  air  castles  because,  as  Thoreau 
pointed  out,  an  air  castle  is  an  excellent  thing  if  you 
put  foundations  under  it. 

The  buyer  of  nitrates,  goatskins,  wool,  coffee  and 
other  Latin  American  products,  on  the  contrary,  is  a 
merchant,  a  broker,  a  commission  man  who  produces 
nothing  himself.  He  neither  imagined  nor  created 
Amazon  rubber.  He  takes  things  as  he  finds  them,  in 
sacks  and  bales.  Pounds,  prices,  freight  rates,  ex- 
change, interest,  delays,  damage — these  are  the  factors 
in  his  success  or  failure.  Ever  since  commerce  began 
he  has  been  rendering  his  indispensable  service,  taking 


8       BusmEss  m  south  ameeica 

things  from  the  places  where  they  are  produced  to  the 
places  where  they  are  needed. 

The  romantic  manufacturer  forgets  the  failure  of  yes- 
terday in  creating  something  new  to-day. 

The  realistic  merchant  doesn^t  forget — he  takes  a 
sharp  knife  and  cuts  the  biscuit  of  Amazon  rubber  to  be 
sure  that  he  is  buying  no  more  stones  at  a  dollar  a 
pound. 

The  realist  has  to  know  Latin  America  to  the  ex- 
tent of  understanding  its  products — where  and  when 
the  different  things  are  gathered,  and  how,  and  the  de- 
tails of  financing,  shipping,  protection  against  adultera- 
tion and  deterioration,  and  the  grading  and  final  sale. 

The  romanticist  can  enter  Latin  America  with  an  air 
castle.  Business  slackens  at  home.  He  turns  to  export 
trade.  Probably  by  the  time  his  salesmen  make  head- 
way abroad,  business  is  good  again  at  home.  His  Latin 
American  orders  are  skimped,  and  his  connections  neg- 
lected. He  regards  the  Southern  continent  as  an  easy 
market  for  his  surplus  and  seconds,  a  place  where  goods 
sell  themselves  without  trouble  or  expense,  to  be  en- 
tered any  time  by  mailing  a  few  circulars  or  catalogues. 
The  department  heads  are  called  together,  there  is  a 
"South  American  Week"  at  the  home  office,  and  the  air 
castle  is  fabricated.  But  next  week  interest  centers  on 
something  else,  and  South  America  is  forgotten — the 
air  castle  never  got  its  foundation. 

The  best  old-style  razor  sold  in  Argentina  before  the 
war  was  of  German  make,  with  a  trade  mark  estab- 
lished by  years  of  familiarity.  During  the  war  an 
American  razor  of  equal  quality  gained  a  foothold  in 


WANTED— BUSINESS  IMAGINATION       9 

Argentina  because  nothing  else  in  that  line  was  obtain- 
able by  importers.  Having  taken  the  German  trenches, 
the  American  razor  concern  could  be  certain  of  a  coun- 
ter-attack when  the  Germans  were  again  able  to  ship 
goods.  That  called  for  consolidation  of  the  position. 
The  quick  way,  the  right  way,  the  American  way  to 
consolidate  such  a  position  is  by  consumer  advertising. 
The  razor  concern  had  a  representative  in  Buenos  Aires 
not  only  capable  of  conducting  such  an  advertising  cam- 
paign, but  earnestly  advising  that  it  be  done  in  antici- 
pation of  the  returning  Germans.  At  home  this  cor- 
poration spends  thousands  of  dollars  monthly  in  con- 
sumer advertising,  recognizing  the  printed  word  as  the 
cheapest  form  of  salesmanship.  But  in  Argentina  it 
would  not  even  appropriate  the  price  of  a  page  in  Amer- 
ican magazines  for  a  year's  advertising  campaign.  It 
would  not  invest  its  profits  on  sales  for  two  oj*  three 
years  to  establish  a  reputation.  Worse  than  that,  it 
complained  that  Argentina  had  not  purchased  the  arbi- 
trary "quota"  assigned  to  it  from  the  manufacturer's 
office  in  the  United  States,  a  quota  arrived  at  by  ascer- 
taining the  population  of  Argentina,  and  then  applying 
to  it  the  percentage  of  sales  in  territory  at  home  which 
had  been  cultivated  ten  years  with  consumer  advertising 
and  aggressive  salesmanship. 

Instance  after  instance  might  be  given  to  illustrate 
this  same  inability  to  export  imagination. 

Not  all  American  manufacturers  are  direct  exporters, 
or  have  their  salesmen  or  branches  abroad.  Indeed,  it  is 
claimed  by  export  merchants  that  they  carry  on  most 
of  the  world  trade  of  our  manufactured  industries,  tak- 


10        BUSINESS  IN  SOUTH  AMEKICA 

ing  care  of  shipping,  credit,  finance  and  other  details 
which  a  manufacturer  without  a  merchandising  organi- 
zation is  not  well  equipped  to  handle.  Even  where 
manufacturers  export  directly  themselves,  they  usually 
sell  to  merchant  importers  in  other  countries.  This  is 
true  of  even  our  largest  corporations,  which  may  main- 
tain offices  in  the  major  countries,  but  do  a  vast  amount 
of  their  world  trade  through  export  merchants  in  the 
United  States  when  supplying  smaller  markets  abroad. 
Business  conducted  along  these  lines,  of  course,  means 
one  more  removal  imaginatively,  and  greater  handicaps 
in  developing  world  markets  on  the  intimate  lines  found 
successful  at  home. 

Governments  deal  romantically  with  Latin  Amer- 
ica. Once  the  haunt  of  the  privateer  and  freebooter 
after  Spanish  gold,  now  it  is  the  happy  hunting  ground 
of  the  official  mission.  Cabinet  ministers  make  their 
grand  progress  from  country  to  country,  shaking  hands 
and  eating  dinners  for  a  day  or  two  at  each  capital* 
Warships  in  times  of  peace,  being  popularly  regarded 
as  idle  equipment  which  might  be  working  for  their 
nations,  are  sent  to  visit  Latin  America  in  the  interest 
of  commerce.  Commissions  of  government  experts 
make  their  studies  and  recommend  more  government  ma- 
chinery in  the  interests  of  Latin  American  trade.  Spe- 
cialists make  their  studies  singly,  and  write  treatises 
full  of  general  information  and  good  counsel. 

Our  own  government  has  probably  done  more  along 
the  latter  line  than  any  other.  Its  publications  are 
encyclopedias  covering  every  detail  of  How  to  Do  It, 
and  we  maintain  practically  an  industrial  census  bureau 


WANTED— BUSINESS  IMAGINATION      11 

in  each  of  the  leading  Southern  countries  in  our  com- 
mercial attaches  and  special  investigators. 

The  official  mission  is  usually  a  junket,  and  may 
create  more  ill  will  than  commercial  friendship,  for 
sombody  is  inevitably  left  out,  or  snubbed,  and  some- 
times a  sensitive  republic  passed  by.  Trade  informa- 
tion compiled  by  specialists  is  useful  if  business  men 
would  act  upon  it.  But  these  methods  are  open  to  criti- 
cism because  they  do  not  get  close  enough  to  real  trade. 

If  governments  spent  money  in  things  that  the  busi- 
ness man  sorely  needs,  such  as  better  postal  service,  the 
simplification  and  speeding  up  of  customs  routine,  the 
weeding  out  of  inexperienced  and  shifty  exporters  at 
home,  and  the  adjustment  of  misunderstandings  and 
damage  claims  abroad,  their  activities  would  be  linked 
more  directly  with  business  actually  being  done. 

Our  romantic  attitude  toward  Latin  America  is  also 
due  partly  to  the  books  and  technical  journals  that  have 
pictured  its  trade  as  something  easy  to  get  and  manage. 
^Manufacturers  have  been  assured  that  exporting  re- 
quires no  particular  skill,  or  organization,  or  even  at- 
tention, but  that  their  surplus  goods,  and  even  their 
damaged  stuff,  may  be  dropped  into  the  export  slot,  and 
the  money  of  the  eager  Latin  American  buyers  will  fall 
into  their  hands.  This  has  encouraged  dabbling  in  the 
trade  without  knowledge  of  Latin  American  countries, 
or  even  the  disposition  to  investigate  them.  It  has 
also  brought  into  existence  the  mushroom  export  house 
in  the  United  States,  mishandling  the  products  of  man- 
ufacturers, and  creating  ill  will  for  them  in  Latin 
America,  where  they  should  be  dealing  directly  through 


12         BUSIIS'ESS  IN  SOUTH  AMEEICA 

their  own  export  departments.  It  haa  also  facilitated 
competitive  control  of  American  goods.  The  manu- 
facturer content  to  let  his  products  take  the  easiest 
channel  has  often  given  Latin  American  territory  to 
importers  of  other  nationalities,  whose  purpose  is  not  to 
sell  and  stimulate  demand,  but  to  get  him  out  of  the 
market,  while  deluding  him  with  the  notion  that  he  is 
in  it.  This  should  not  suggest  that  representatives  of 
other  nationalities  are  always  untrustworthy.  On  the 
contrary,  many  of  them  are  effective  distributors  of 
American  goods  in  world  markets,  and  preferable  to 
mushroom  export  houses  in  the  United  States. 

The  '^easiest  way"  may  be  downright  dishonesty.  The 
Yanlvce  traveling  on  the  Southern  continent  will  run 
across  l)usiness  episodes  that  make  him  ashamed  of 
some  of  his  countrymen. 

In  Lima  a  public-spirited  Peruvian  was  building  out 
of  his  own  pocket  an  opera  house  which  in  other  Latin 
American  countries  would  have  been  a  municipal  or 
national  undertaking.  Much  of  his  material  had  been 
selected  from  American  catalogues.  He  was  outspoken 
in  his  admiration  for  our  plumbing  and  lighting  fix- 
tures, our  porcelains,  encaustic  tiles,  synthetic  products 
and  safety  devices.  Among  other  things  he  had  or- 
dered theater  seats  in  the  United  States  from  a  fine 
sample — well  finished  semi-steel  frame,  leather  up- 
holstery and  the  monogram  of  his  theater  on  its  back. 
Cash  payment  for  the  seats  was  demanded  before  ship- 
ment. He  got  seats  with  rough  cast-iron  frames 
gaudily  decorated,  upholstered  in  imitation  leather, 
without  monograms.     They  were  worth  less  than  the 


WANTED— BUSINESS  IMAGINATION      13 

ones  he  had  paid  for.  More  than  half  of  them  were 
broken.  Newspapers  used  for  wrapping  had  stuck  to 
the  imitation  leather.  Two  years'  correspondence  with 
the  manufacturer  led  to  no  redress. 

Some  American  manufacturers  deal  splendidly  with 
the  Southern  continent.  Their  goods  are  adapted  to 
the  demand,  skillfully  distributed  through  branches  or 
well-chosen  representatives,  and  backed  up  with  ser- 
vice. One  interesting  fact  about  these  manufacturers 
is  that  they  are  large,  the  majority  of  them  being 
^'trusts."  Another  significant  point  is  that  they  have 
grown  to  such  size  that  it  is  necessary  for  them 
to  seek  markets  in  other  countries,  keeping  their  pro- 
duction at  maximum  volume  to  profit  by  the  corre- 
sponding economies.  It  was  estimated  that  fully 
seventy-five  per  cent  of  our  manufactured  exports  to 
Latin  America  in  1913  were  products  of  large  corpora- 
tions. This  was  partly  accounted  for  by  the  fact  that 
such  corporations  had  capital  to  finance  export  trade, 
whereas  smaller  manufacturers  were  hampered  by  lack 
of  capital  and  banking  machinery  had  not  yet  been 
devised  to  aid  them.  These  lines  include  electrical 
apparatus,  locomotives  and  railroad  equipment,  cash 
registers,  typewriters,  phonographs  and  records,  adding 
machines,  office  appliances  and  systems,  clocks  and 
watches,  sewing  machines,  farm  implements,  mining 
machinery,  toilet  preparations  and  the  like.  The  Chi- 
cago meat  packers  are  among  the  leading  American 
interests  on  the  Southern  continent.  Our  moving  pic- 
ture industry  is  also  active,  finding  a  profitable  market 
for  its  surplus  films. 


14        BUSINESS  m  SOUTH  AMEEICA 

Other  American  industries  are  unquestionably 
approaching  the  point  where  export  sales  will  be  a 
matter  of  necessity,  not  choice.  The  automotive  indus- 
try has  reached  it  already,  and  needs  the  Latin  Ameri- 
can market  for  its  quantity-production  passenger  cars, 
motorcycles,  trucks  and  farm  tractors.  To-morrow  we 
will  be  seeking  outlets  for  such  diversified  quantity- 
products  as  ships  and  cheese,  motor  boats  and  butter, 
machine  tools  and  aniline  dyes.  The  principle  of  the 
exportable  surplus  applies  even  to  such  a  quantity- 
product  as  our  news,  which  is  now  being  cabled  to 
Latin  American  dailies  by  our  great  news-gathering 
associations,  bringing  its  profit  in  money,  presumably, 
but  a  far  greater  return  in  acquaintance  and  favorable 
opinion. 

The  burden  of  complaint  against  our  exporting  in 
the  past  has  centered  on  details — careless  packing, 
ignoring  of  the  customer's  language,  unfavorable  credit 
terms,  and  so  on.  It  is  a  familiar  story,  which  the 
reader  can  doubtless  complete. 

But  these  shortcomings  are  symptoms,  nothing  more. 
They  will  disappear  when  the  real  disorder  is  under- 
stood and  attacked.  That  is  our  ignorance  about  our 
customers  abroad.  In  the  matter  of  the  Latin  Ameri- 
can market,  we  are  ready  to  idealize  the  Latin  Ameri- 
can, and  to  expect  great  things  from  him  in  the  way 
of  buying  demand.  But  we  will  not  take  the  trouble  to 
get  acquainted  with  him,  and  his  diversified  countries. 

"We  are  just  about  ready  to  begin  exporting  to  your 
country,"  said  an  American  manufacturer  to  an 
Argentine  professor,   his   neighbor   at   a  world   trade 


WANTED— BUSIIsrESS  IMAGmATION      15 

dinner.     "Our  house  realizes  that  it  muBt  do  something 
to  help  the  Argentine." 

"Mj  dear  sir!"  exclaimed  the  Argentine.  "We  do 
not  need  help.  Come  and  do  business  with  us  and 
make  money.  Make  lots  of  money!  That  is  the  best 
business  relationship  between  your  country  and  mine." 

Let  any  one  going  to  Latin  America  as  the  repre- 
sentative of  an  American  business  house  be  guided  by 
this  viewpoint.  Take  our  business  astigmatism  into 
account,  and  insist  upon  several  things. 

One,  an  ironclad  contract  binding  the  American 
business  house  seeking  export  trade  to  a  consistent 
policy  instead  of  a  passing  adventure. 

Another,  that  the  goods  the  representative  is  to  sell 
in  Latin  America  must  be  allotted  to  his  territory,  and 
nothing  in  the  way  of  unforeseen  demand  or  production 
difficulties  at  home  be  allowed  to  interfere  with  the 
shipments  that  are  vital  to  his  success. 

Furthei-more,  that  the  selling  effort  in  Latin  America 
shall  not  cease  with  a  few  shipments,  nor  the  first  three 
months'  activities,  but  be  planned  for  several  years,  so 
that  real  connection  can  be  made,  and  outlets  created 
for  the  surplus  of  five  or  ten  years  hence,  when  they 
will  be  needed,  and  badly. 

One  of  the  best  examples  of  the  right  way  to  set  out 
was  that  of  an  automobile  man  who  undertook  South 
American  distribution  for  a  motor  corporation  entering 
that  field  for  the  first  time. 

The  biggest  sale  he  had  to  make  was  not  in  Rio  de 
Janeiro  or  Buenos  Aires,  but  before  he  started,  to  the 
executives  of  the  corporation  itself.    When  he  set  out, 


16         EUSmESS  IN  SOUTH  AMERICA 

tlie  company  could  not  fill  tlie  demand  for  its  cars.  Al- 
lotment of  even  a  small  number  to  South  America  re- 
quired careful  management,  and  endangered  dealer 
connections  at  home.  But  the  curve  of  production 
indicated  a  surplus  in  about  three  years.  Because 
South  America  was  clamoring  for  automobiles,  that  was 
the  psychological  time  to  set  up  an  organization  and 
give  cars  and  service.  Other  motor  manufacturers 
were  dabbling  with  stray  cable  orders  for  a  few  cars, 
sent  by  South  American  importers  who  merely  wanted 
to  add  automobiles  to  a  diversified  line  of  general 
merchandise.  Through  the  experience  of  this  repre^ 
sentative,  who  was  thoroughly  acquainted  with  South 
America,  a  policy  was  developed,  embodied  in  a  con- 
tract, and  carried  out  regardless  of  difficulties. 

ITot  a  few  American  business  men  assume  that  doing 
business  on  the  Southern  continent  involves  "educat- 
ing" the  Latin  American  to  their  products. 

But,  on  the  contrary,  it  is  the  American  business 
man  himself  who  is  going  to  school — not  a  kinder- 
garten where  he  will  learn  how  to  pack  and  ship  for 
export,  but  a  college  where  he  will  learn  to  lay  out  a 
broad  executive  world  trade  policy,  and  stick  to  it 
through  thick  and  thin. 

Over  many  an  executive  desk  in  this  country  hangs 
the  familiar  motto,  "Do  It  ^tTow." 

In  every  business  office  having  relations  with  South 
America,  and  world  trade  generally,  a  homely  English 
saying  should  be  substituted: 


irS  DOGGED  AS  DOES  IT! 


CHAPTER  II 

WHAT   SOUTH  AMERICA  IS   LIKE 

A  young  Englishman  went  to  Argentina,  and  fell 
in  with  the  Methodists.  They  sent  him  to  the  United 
States  to  attend  an  international  conference.  He  was 
the  only  dele2:ate  from  South  America.  Our  Metho 
dists  knew  little  about  Argentina.  He  was  a  salesman. 
Tired  of  explaining  in  words,  he  took  a  map  of  South 
America,  cut  Argentina  out  bodily,  and  pinned  it  to  a 
map  of  Xorth  America  of  the  same  scale. 

^There — that  is  Argentina,"  he  announced.  ''It 
reaches  from  Hudson's  Bay  to  Mexico  City.  That  is 
the  kind  of  country  I  come  from." 

After  which  they  admitted  that  it  must  be  a  real 
regular  country,  though  they  had  neyer  heard  about  it. 

When  it  comes  to  South  American  geography,  we 
Yankees  are  constantly  making  ^'howlers."  There  is 
the  Congressman  who  wanted  to  know  why  Brazil 
couldn't  send  soldiers  to  Erance  through  the  Panama 
Canal.  And  the  old  college  chum  who  told  an  Ameri- 
can in  Pio  de  Janeiro  to  motor  down  some  Saturday 
afternoon  and  see  their  friend  Bill  in  Montevideo — a 
little  trip  of  about  the  distance  from  l^ew  York  to 
Kansas  City,  with  not  a  mile  of  road.  And  the 
American  novelist  who  located  a  tropical  island  ''nine 

17 


18 


BUSINESS  m  SOUTH  AMERICA 


days  south  of  Bio" — whicli  would  be  near  the  Antarctic 
circle.  Kipling  in  one  of  his  early  tales  sent  a  German 
scientist  to  hunt  coral  snakes  in  the  tropical  jungles  of 
Uruguay,  and  his  scientist  died  of  coral  snake-bite.  Of 
course,  the  tropical  jungles  of  Uruguay,  and  its  coral 
snakes,  are  just  about  like  those  of  Illinois  or  Massa- 
chusetts. 

But  "howlers"  in  geography  are  as  unfair  as  they 
are  amusing  if  you  want  to  prove  ignorance.  For  why 
should  the  average  American  carry  a  gazetteer  in  his 
head?  He  may  be  just  as  vague  about  localities  and 
distances  in  his  own  country,  like  the  ^N'ew  England 
Yankee  who  said  he  had  a  brother  "Out  West" — in 
Pennsylvania.  Books  were  devised  by  Man  to  hold  such 
facts  so  that  heads  could  be  used  to  better  purpose. 

However,  South  America  is  an  interesting  continent, 
and  it  may  help  the  reader  visualize  its  business  possi- 
bilities if  we  skim  over  some  of  its  geography.  The 
subject  need  not  be  dull. 

If  you  have  a  map  of  South  America  hang  it  on  the 
wall. 

Then  pin  beside  it  this  diagram,  which  illustrates 
something  about  South  America  that  few  people  seem 
to  know — its  relationship  to  our  own  continent. 


WHAT  SOUTH  AMERICA  IS  LIKE        19 

When  tiie  Congressman  wanted  to  know  why  the 
Brazilians  did  not  use  the  Panama  Canal  he  probably 
thought  that  South  America  was  right  under  North 
America,  which  is  all  wrong,  and  is  a  popular  notion 
that  often  leads  to  business  blunders.  If  you  started 
straight  south  from  New  York  in  an  airplane,  expect- 
ing to  land  in  South  America,  there  would  be  a  chance 
of  reaching  only  two  of  its  important  cities,  Quito  and 
Lima,  which  are  the  only  ones  west  of  New  York.  If 
you  missed  the  extreme  western  borders  of  Colombia, 
Ecuador  and  Peru  you  would  miss  the  whole  contin- 
ent, and  plop  into  the  Pacific  ocean,  which  is  very  deep 
and  chilly  in  those  parts. 

Eor  years  people  have  talked  of  the  Pan-American 
railroad,  and  through  trains  from  New  York  to  Buenos 
Aires.  Several  different  Pan-American  railroads  are 
actually  being  pieced  together  in  South  America,  but 
even  when  they  are  finished  through  trains  from  New 
York  to  Buenos  Aires  will  hardly  be  popular.  Eor  the 
trip  will  involve  crossing  three  continents — our  own 
from  New  York  to  Mexico  City,  then  back  to  the  longi- 
tude of  New  York  along  Central  America's  stony  spine, 
and  thence  across  South  America  itself.  Pan-Amer- 
ican railroads  will  be  wonderful  conveniences  for  local 
travel,  but  ships  will  beat  them  for  comfort  and  speed 
in  through  travel,  to  say  nothing  of  aircraft. 

Another  fact  about  the  continent  that  astonishes 
many  people  is  its  size.  It  is  not  a  large  continent,  as 
continents  go,  being  next  to  the  smallest,  about  twice 
the  size  of  Europe.  It  is  also  the  most  sparsely  popu- 
lated continent,  with  only  7.4  persons  to  the  square 


20         BUSINESS  IN  SOUTH  AMERICA 

mile.      But  while  our  continent   is  1,000,000   square 
miles  larger,  South  America  is  actually  bigger  in  some 

ways. 

North  America  is  widest  at  the  top,  and  a  good  third 
of  it  too  cold  for  habitation  or  productiveness.  South 
America  is  widest  in  the  fertile  tropics,  and  runs  o3 
into  a  sliver  in  the  cold  Southern  region.  So  it  has 
more  area  suitable  for  Man. 

Brazil  alone  is  larger  than  the  United  States. 
Argentina  is  larger  than  Mexico  and  all  Central 
America.  Subtract  Brazil  and  the  Guianas,  and  South 
America  is  still  as  big  as  Canada.  Subtract  Mexico 
and  Central  America  from  our  continent,  and  lump 
them  in  with  Latin  America,  to  which  they  belong 
racially,  and  then  Latin  America  is  larger  than  the 
United  States  and  Canada. 

In  population,  South  America  compares  very  well, 
too.  Eor  it  has  two-thirds  as  many  people  as  the 
United  States  and  Canada — 80,000,000  as  compared 
with  about  120,000,000.  South  American  distances  are 
usually  magnificent,  and  astonish  Yankees,  as  do  such 
discoveries  as  that  the  Argentines  are  white  and  the 
Brazilians  speak  Portuguese.  There  is  an  actual  in- 
stance of  an  American  manufacturer  advertising  his 
goods  in  a  Rio  de  Janeiro  newspaper  and  referring  the 
Brazilians  to  his  dealer  in  Quito,  Ecuador.  The  quick- 
est way  to  reach  Quito  from  Rio  de  Janeiro  is  by  ocean 
liner  to  New  York  and  down  the  West  Coast  through 
the  Panama  Canal.  Peru  has  a  seaport  to  the  east, 
over  the  Andes,  which  is  reached  by  sailing  down  to 
Chile,  taking  the  train  to  Buenos  Aires,  then  an  ocean 


WHAT  SOUTH  AMEEICA  IS  LIKE        21 

liner  to  tlie  mouth  of  the  Amazon,  and  a  river  steamer 
to  this  landlocked  seaport  of  Iquitos  or  around  by 
Panama. 

With  a  little  knowledge  of  South  American  geogra- 
phy you  can  contrive  numerous  traps  for  the  know-it- 
all.  Bet  him  that  Valparaiso,  Chile,  isn't  west  of  J^ew 
York.  If  he  takes  you  up  you  win.  And  a  good  many 
old  hands  in  South  America  do  not  know  that  Mon- 
tevideo is  south  of  Buenos  Aires. 

Distance  is  interesting  because,  once  realized,  busi- 
ness men  lose  the  notion  that  one  South  American 
country  can  be  "worked"  from  another.  This  is  not 
true  even  of  neighbors  like  Argentina  and  Uruguay, 
right  across  the  river  from  each  other,  because  each  has 
its  own  way  of  doing  business.  It  is  a  conmaon  and 
costly  notion,  cherished  in  many  executive  offices,  that 
one  man  in  South  America  can  take  care  of  any  in- 
quiry or  complaint,  jumping  nimbly  from  Buenos 
Aires  to  Para,  Bogota,  Corumba,  and  wherenot,  and 
"fix  things  up."  Accustomed  to  his  Twentieth  Century 
Limited,  when  the  Old  Man  sends  a  salesman  or  en- 
gineer to  South  America  he  will  keep  him  traveling 
from  point  to  point,  wasting  half  his  time  on  ships  or 
trains,  playing  him  like  a  fish  at  the  end  of  the  ocean 
cables. 

The  geology  of  South  America  has  a  bearing  on  its 
business,  because  it  divides  the  continent  into  gi*eatly 
divei'sified  regions. 

It  is  a  very  young  continent,  the  geologists  say — a 
continent  still  in  the  making.  The  Andes  are  being 
pushed  up  out  of  the  Pacific,  with  earthquakes  and  vol- 


22         BUSmESS  m  SOUTH  AMEEICA 

canic  eruptions,  and  worn  away  on  the  east  by  water, 
wind  and  ice.  And  probably  the  eastern  coast  of  the 
continent  is  slowly  sinking  beneath  the  Atlantic — geol- 
ogists hold  different  views  about  this.  The  Eastern 
coast  has  its  mountain  range,  and  it  is  conjectured 
that  a  great  sea  occupied  what  is  now  the  interior  of 
the  continent  from  the  region  of  Buenos  Aires  to  cen- 
tral Brazil.  A  great  mountain  range  in  central  Brazil 
was  eroded  into  this  sea,  filling  it  up,  making  the  fer- 
tile River  Plata  basin.  Another  theory  is  to  the  effect 
that  this  sea  extended  straight  through  to  the  Carib- 
bean, and  that  South  America  was  two  distinct  conti- 
nents, both  small,  but  each  with  its  own  tribes  and 
animals. 

Whenever  they  try  to  account  for  South  Americans 
animals  the  naturalists  and  geologists  have  to  build 
theoretical  barriers.  Sometimes  they  account  for  dif- 
ferences by  the  interior  sea,  and  again  use  the  Andes 
as  a  barrier.  Darwin  reasoned  that  the  Mexican  pla- 
teau fenced  iNorth  American  animals  off  from  the 
Southern  continent.  South  America  had  no  cattle, 
horses,  pigs,  sheep,  goats,  cats  or  dogs.  Its  animals 
axe  few  and  small  compared  with  those  of  the  other 
continents,  and  also  of  a  primitive  type  which  seem  to 
have  shrunk  instead  of  evolving.  Like  the  rest  of  the 
world  it  had,  in  the  remote  past,  its  huge  monsters  in 
vast  numbers,  still  evident  in  their  abundant  fossil  re- 
mains. Where  the  monsters  of  other  continents  were 
replaced  by  animals  with  better  weapons,  brains  and 
hustling  ability,  the  South  American  types  dwindled, 
so,  that  the  little  armadillo,  once  the  size  of  a  house, 


WHAT  SOUTH  AMEEICA  IS  LIKE        23 

has  a  shell  that  nowadays  makes  a  lady's  workbasket. 

The  scientist's  barriers  aid  one  in  thinking  about 
South  America  for  business  purposes,  because  they 
divide  the  continent  into  regions  distinctly  different 
from  each  other  in  population,  products  and  prospects. 
Some  of  the  countries  are  in  the  filled-in  sea,  basin 
countries  like  Argentina,  Uruguay  and  Paraguay. 
Others  are  rim  countries,  up  on  the  top  of  the  walls 
that  surround  the  basin,  like  Peru,  Bolivia,  Ecuador, 
Colombia.  Brazil  is  both  a  rim  and  a  basin  country, 
and  so  is  Chile,  for  though  the  latter  is  largely  rim,  its 
development  promises  to  be  along  the  coastal  portion. 

It  is  curious  that  the  most  advanced  pre-conquest 
people  in  South  America  developed  in  the  most  difficult 
place  to  live,  along  the  cold,  steep,  arid  rim  of  the 
Andes,  in  Peru  and  Ecuador.  Elsewhere  there  were 
only  savages.  The  Spaniards  set  up  their  adminis- 
tration in  Peru,  exploited  the  country  for  gold,  silver 
and  gems,  and  ignored  the  eastern  coast,  which  had 
none  of  these  easy  riches.  That  gave  the  Portuguese 
their  opportunity  to  seize  Brazil.  The  richest  part  of 
the  continent,  its  fertile  basins,  was  left  for  the  last  in 
development.  The  Incas  might  have  farmed  the  Ar- 
gentina pampas,  perhaps.  But  they  had  no  livestock 
except  the  mountain-dwelling  llama,  alpaca  and 'vicuna. 
Likewise  they  had  no  wheat,  barley,  rice,  rye,  oats,  or 
millet.  Their  chief  staples  were  corn  and  potatoes. 
Crops  might  have  been  grown  in  the  pampas,  but  it 
w^ould  have  been  difficult  to  carry  them  to  consumers. 
When  cattle  and  horses  were  brought  into  the  pampas 


24         BUSmESS  m  SOUTH  AMEEICA 

thej  multiplied,  becoming  great  wild  herds.  Eirst 
they  were  killed  for  their  hides,  the  only  exportable 
product.  But  when  beef  extract  began  to  be  made,  and 
the  refrigerator  ships  took  chilled  beef  to  Europe, 
and  the  world  looked  to  Argentina  and  Uruguay  for 
grain,  those  basin  countries  quickly  became  the  richest 
and  most  progressive  in  South  America.  Their  indus- 
tries and  prosperity  are  now  spreading  up  into  the 
basin  regions  of  ParagTiay  and  Brazil.  The  rim  coun- 
tries, on  the  contrary,  have  fallen  into  second  place,  and 
must  be  developed  in  new  directions. 

A  good  way  to  divide  South  America  is  into  two 
basins  and  two  rims,  a  plan  followed  by  William  H. 
Lough,  one  of  Uncle  Sam's  special  agents,  who  in- 
vestigated banking  conditions  in  South  America.  Each 
of  these  regions  has  its  own  kind  of  people,  climate, 
products,  shipping  routes,  trade  connections  and  eco- 
Qomic  life  generally.  And  each  of  them  has  closer  busi- 
ness relations  with  the  United  States  and  Europe  than 
with  any  of  the  other  regions.  That  is  a  striking  fact 
about  all  the  South  American  Eepublics,  and  those  of 
Central  America  too,  that  they  do  very  little  business 
with  each  other.  Sometimes  they  have  the  same  things 
to  sell.  Sometimes  distance  hinders  trading.  But  a 
certain  amount  of  jealousy  enters  into  the  equation, 
and  there  are  difficult  tariff  walls  around  the  separate 
countries. 

Varying  Mr.  Lough's  arrangement  a  little,  we  will 
put  the  four  regions  in  the  order  of  their  present  de- 
velopment, thus: 


\YHAT  SOUTH  AMEKICA  IS  LIKE        25 

First— The   Kiver   Plata   Basin. 
Second — The  West  Coast  Eim. 
Third — The  Amazon  Basin. 
Fourth — The  North  Coast  Eim. 

The  Eiver  Plata  basin  includes  the  best  part  of 
Argentina,  all  of  Uruguay  and  Paraguay,  and  Brazil 
as  far  north  as  the  state  of  Matto  Grosso  with  some  of 
Bolivia,  where  that  altitudinous  republic  climbs  down 
from  its  austere  mountain  heights  and  becomes  tropi- 
cal montana.  Travelers  who  are  disappointed  be- 
cause there  are  no  parrots  or  monkeys  running  wild  in 
Buenos  Aires  will  find  the  hottest  parts  of  this  basin 
only  subtropical.  Oranges  grow  in  the  suburbs  of 
Montevideo,  the  southern  edge  of  the  basin,  and  on  the 
northern  edge  there  are  the  cool  plateaus  of  Matto 
Grosso,  a  future  cattle  range  country,  another  Texas, 
with  a  temperature  and  healthy  climate  in  tropical  lati- 
tudes. J^early  half  the  population  of  South  America 
is  concentrated  in  this  basin,  and  more  than  half  the 
wealth  and  production.  It  includes  the  coffee  district 
of  Brazil  and  the  beef  and  grain  industries  of  Argen- 
tina and  Uruguay.  The  people  are  practically  all 
white  in  Buenos  Aires  and  Montevideo,  becoming  mixed 
with  negi'o  and  Indian  blood  towards  Uruguay's  Brazi- 
lian border,  and  Indian  blood  in  northern  Argentina 
and  Paraguay. 

The  West  Coast  rim  runs  from  northern  Ecuador 
down  through  Peru  and  western  Bolivia  to  the  wilds 
of  Patagonia,  This  is  largely  the  old  Empire  of  the 
Incas.    Most  of  the  people  in  Peru,  Ecuador  and  Boli- 


26         BUSmESS  m  SOUTH  AMEKICA 

via  are  Indians,  descendants  of  the  Incas'  subjects, 
living  at  altitudes  of  10,000  to  15,000  feet.  The 
Chileans  had  to  exterminate  the  warlike  Araucanian 
Indians,  so  that  country  has  a  greater  proportion  of 
white  blood.  Most  of  this  coast  is  rainless,  though  its 
winter  fogs  come  pretty  close  to  drizzle.  Southern 
Chile  has  an  ample  rainfall.  The  products  are  nitrates, 
copper,  wool,  cotton,  g-uano — mostly  mineral  products, 
as  these  countries  were  at  South  America's  back  door 
until  the  Panama  Canal  was  opened.  Bolivia  and 
Peru  have  rich  undeveloped  tropical  regions  to  the 
east  over  the  Andes,  part  of  the  Amazon  basin,  await- 
ing railroads  and  settlers.  Their  only  outlet  to  mar- 
ket now  is  down  the  tributaries  of  the  Amazon.  Here 
is  Peru's  inland  seaport  Iquitos,  and  Bolivia  reaches 
markets  over  the  curious  Madeira-Mamore  railroad, 
which  takes  goods  around  several  hundred  miles  of 
rapids,  filling  the  one  impassable  place  in  the  long  river 
journey  to  the  Atlantic. 

The  third  great  region  is  the  Amazon  Basin.  This 
mighty  stream  is  not  so  much  a  river,  geologists  say, 
as  the  remnant  of  South  America's  ancient  inland  sea. 
The  Amazon  country  is  the  wildest  part  of  South 
America,  the  inhabitants  chiefly  Indians  and  negroes 
• — rubber-gatherers  supervised  by  a  few  white  over- 
seers and  traders.  This  is  the  truly  tropical  section 
of  the  continent,  a  vast  productive  region  that  Man 
will  one  day  clean  up  and  settle.  Although  chiefly  in 
Brazil,  it  is  practically  isolated  from  that  country's 
capital  and  coast  cities.  In  one  part  of  Brazil,  by 
carrying  a  canoe  a  short  distance  through  the  wilds,  it 


WHAT  SOUTH  A]\IEEICA  IS  LIKE        27 

is  possible  to  travel  up  the  Amazon  and  come  out  at  tlie 
Kiver  Plata  at  Buenos  Aires  with  a  single  portage. 
Eio  de  Janeiro  is  decidedly  more  isolated.  Brazil  is 
really  two  countries  from  the  business  standpoint,  one 
along  the  Atlantic  seaboard  and  the  other  the  Amazon 
Basin.  Products  of  the  Amazon  region  are  rubber, 
Brazil  and  other  nuts,  some  tropical  woods,  and  a  very 
little  soil  produce. 

The  ^N'oi'th  Coast  Rim  comprises  Venezuela  and 
Colombia,  linking  up  with  the  Central  American  coun- 
tries in  its  products  and  trade.  The  climate  is  torrid. 
Coffee,  sugar,  chocolate,  tobacco,  tropical  fruit  and 
nuts  are  grown,  with  cattle  in  the  higher  interior  lands. 
This  is  also  a  future  mining  region.  The  people  are 
^^Q  to  ten  per  cent  white,  ten  per  cent  Indian  and 
the  rest  of  mixed  blood. 

Many  persons  find  it  difficult  to  distinguish  between 
the  different  Latin  American  countries — like  the 
American  woman  who  spent  some  time  studying  Span- 
ish when  she  went  to  Rio  de  Janeiro  before  discovering 
that  it  was  not  the  language  of  the  country.  The  Re- 
publics are  all  different  from  each  other,  and  very  proud 
of  their  individuality.  One  needs  separate  memory 
pegs  for  each  of  them  upon  which  to  hang  informa- 
tion. A  very  good  way  to  sort  them  out  mentally  is 
this : 

There  are  twenty  republics  altogether.  Ten  are  in 
South  America  and  ten  in  Central  America.  Begin 
with  South  America  first.  Think  of  A  B  C,  and  let 
those  letters  stand  for  Argentina,  Brazil  and  Chile,  the 


28         BUSINESS  m  SOUTH  AMEEICA 

leading  countries  in  population,  wealth,  territory,  dip- 
lomacy, stability  and  enterprise.  Then  add  a  plus  mark 
for  two  other  countries — A  B  C  +  Uruguay  and 
Peru,  who  are  anxious  to  be  in  South  America's  lead- 
ing set,  and  rightly.  Uruguay  is  smallest,  but  a  sturdy 
little  country  that  would  not  be  annexed  to  either  Ar- 
gentina or  Brazil,  a  land  noted  for  its  fighters,  business 
men,  authors  and  intellectuals  generally.  Peru  is  the 
empire  of  the  Incas,  the  old  seat  of  the  viceroys,  and 
the  most  Spanish  of  all  Latin  American  countries. 
This  leaves  five  poor  little  sisters,  or  rather  princesses 
in  disguise,  countries  of  great  possibilities,  but  as  yet 
little  developed.  Two  of  them  are  in  the  south,  Para- 
guay, which  is  logically  a  future  Argentina,  but  al- 
most depopulated  by  past  wars,  and  Bolivia,  the  high 
mountain  republic,  isolated  from  the  sea,  the  arid 
Switzerland  of  South  America.  The  other  three  are 
in  the  north — Ecuador,  the  land  of  volcanos  and 
^Tanama"  hats,  Colombia,  the  land  of  emeralds,  and 
Venezuela,  an  upland  Argentina,  with  its  cattle 
ranges,  and  also  resembling  Brazil  with  its  mighty 
liver,  the  Orinoco. 

With  Central  America,  eliminate  Mexico  and  the 
three  island  republics,  Cuba,  the  sugar  bowl,  and  the 
black  republics  of  Santo  Domingo  and  Hayti,  the  lat- 
ter French  in  language.  Santo  Domingo  and  Hayti, 
counted  the  most  backward  of  all,  are  not  really  Latin, 
but  African.  This  leaves  the  six  little  countries  clus- 
tered around  the  Isthmus.  Panama  is  easy  to  remem- 
ber in  connection  with  the  Canal.  I^ext  to  it  lies 
Costa  Eica,    characteristic   for   its  white   population. 


WHAT  SOUTH  AMERICA  IS  LIKE       29 

Tlien  in  order,  going  northward,  come  ^Nicaragua,  with 
its  great  lake,  Honduras,  the  country  of  forests  and 
isolation,  little  Salvador,  smallest  of  them  all,  a  trifle 
larger  than  Maryland,  and  finally  Guatemala,  rich  in 
its  old  Maya  cities,  which  may  some  day  be  a  valuable 
national  asset.  These  little  countries  have  had  many 
political  and  financial  troubles,  probably  owing  to  their 
small  area,  rugged  geography  and  the  difficulty  of  de- 
veloping their  resources,  along  with  considerable  jeal- 
ousy. But  they  are  working  out  their  destinies,  over- 
coming obstacles,  and  finding  expression  for  the  sober 
sense  of  their  common  people,  who  are  largely  the 
hardy,  industrious  Maya  peasants. 

Another  way  to  put  the  leading  countries,  at  least, 
into  mental  pigeonholes  is  to  read  a  little  about  their 
gi-eat  men  and  histories.  The  average  American  dimly 
knows  that  South  America  had  its  liberator,  Simon 
Bolivar,  the  "Washington  of  South  America.'^  But  he 
has  probably  never  heard  of  San  Martin,  the  Wash- 
ington of  Argentina — Artigas,  the  Washington  of 
Uruguay — or  of  Sucre,  or  Miranda,  or  Moreno,  or 
Iturbide,  or  Hidalgo.  Old  Don  Pedro  of  Brazil,  the 
kindly  Emperor  with  the  whiskers — yes,  he  remem- 
bers him,  and  his  admiration  for  Yankee  things, 
but  not  Don  Joao,  or  the  Emperor  John,  who  discov- 
ered his  Brazilian  colony  when  Napoleon  chased  him 
out  of  Portugal,  and  played  the  part  of  a  Washington 
by  opening  Brazil  to  trade,  and  starting  her  on  the  road 
to  independence.  South  American  history  is  far  from 
dry,  with  such  episodes  as  San  ]\rartin's  crossing  of  the 
Andes  with  his  cowboy  army  and  ending  Spanish  rule 


30         BUSINESS  IN  SOUTH  AMEEICA 

on  the  Southern  continent.  And  it  can  be  read  in  the 
entertaining  book  of  Father  J.  A.  Zahm  (^'H.  J. 
Mozans"),  the  priest-explorer  who  accompanied  Colonel 
Roosevelt  through  the  Brazilian  wilderness,  and  who 
has  traversed  all  the  great  rivers  of  South  America, 
following  the  footsteps  of  the  old  Spanish  Conquista- 
dor es.  Eather  Zahm's  charm  is  mental  exploration — 
deep  reading  in  the  old  records  of  the  different  coun- 
tries and  the  ability  to  make  them  alive  for  the  reader. 
His  chief  books  are: 

Along  the  Andes  and  Down  the  Amazon  (Appleton). 
Tip  the  Orinoco  and  Down  the  Magdalena  (Appleton), 
Through  South  Americas  Southland  (Appleton). 
The  Quest  of  El  Dorado  (Appleton). 

Prescott's  Conquest  of  Peru  is  another  basic  work, 
one  of  those  "old-fashioned"  histories  of  the  historians 
who  were  not  afraid  to  tell  stories  and  utilize  human 
interest.  And  Darwin's  Voyage  of  the  Beagle  con- 
tains more  compact,  entertaining  information  about 
the  geology,  geography  and  natural  history  of  the 
Southern  continent  than  any  later  book,  with  innu- 
merable glimpses  of  the  people,  particularly  that  roman- 
tic, self-reliant  figure,  the  gaucho  or  cowboy  of  the 
pampas. 


CHAPTEK   III 

WHAT   THE   PEOPLE   AND   THE   COUNTRIES   ARE   LIKE 

^'Wliy  doesn't  somebody  tell  us  tlie  real  trutli  about 
these  countries?"  protested  an  American  automobile 
man,  in  South  America  for  the  first  time. 

At  home,  optimistic  export  literature  had  impressed 
him  with  the  possibilities  in  countries  like  Brazil,  with 
its  25,000,000  population,  its  great  area,  its  need  for 
motor  trucks  and  passenger  cars.     What  a  market! 

Arriving  in  Kio  de  Janeiro,  he  found  that  there 
was  not  a  single  road  leading  out  of  that  mountain- 
locked  city,  and  but  a  few  hundred  miles  of  modern 
highway  in  Brazil's  interior.  This  statement  may  be 
discredited  soon  by  the  Brazilians  themselves,  for  they 
have  lately  held  several  good  roads  conferences,  and 
numerous  highway  projects  are  afoot — notably,  one 
from  Rio  de  Janeiro  to  Petropolis,  the  summer  capital 
established  by  the  Old  Emperor,  Don  Pedro.  There 
are  some  good  roads  in  the  states  of  Sao  Paulo  and  Kio 
Grande  do  Sul.  But  South  American  highways  shock 
the  American  automobile  man  who  has  pictured  the 
Southern  countries  as  much  like  our  own,  and  that  is 
the  point  to  be  made  here. 

Many  of  the  things  that  Yankees  know  about  South 

31 


82         BUSINESS  IN  SOUTH  AMEKICA 

America  are  interesting,  but  not  true,  as  they  learn 
by  a  visit  to  the  Southern  continent. 

Some  of  us  expect  too  much,  others  too  little.  Hav- 
ing seen  pictures  of  the  capital  cities,  and  heard  that 
Buenos  Aires  has  a  finer  taste  and  a  longer  purse  for 
grand  opera  than  New  York,  and  maybe  having  met 
some  free-spending  Brazilians  or  Argentines,  we  sus- 
pect that  the  South  Americans  are  more  cultured  than 
ourselves^ — as  they  have  admitted.  The  South  Amer- 
ican countries  are  all  republics.  We  expect  to  find  peo- 
ple something  like  ourselves  in  absence  of  caste,  equal- 
ity of  opportunity,  education,  comfort  and  prosperity. 
We  have  heard  of  Latin  courtesy,  and  begin  to  brush 
up  our  manners. 

On  the  other  side  of  the  picture,  we  have  heard 
that  the  South  Americans  are  revolutionists.  We  car- 
toon them  as  ragged  little  Indians,  and  there  is  a  popu- 
lar notion  that  they  are  on  the  racial  toboggan  slide, 
going  down  with  the  declining  Spanish  civilization. 

^'I  don't  know  whether  the  Uruguayans  use  towels," 
a  Philadelphia  manufacturer  recently  wrote  to  an 
Uruguayan  importer,  ^'but  if  they  do,  we  have  some 
fine  products  in  that  line." 

These  are  all  misconceptions,  due  to  distance  and 
lack  of  acquaintance.  Let  us  take  them  up  one  by 
one  and  see  if  we  can  get  nearer  the  truth  without 
hurting  the  South  American's  feelings,  yet  giving  the 
American  business  man  a  basis  for  gauging  possibili- 
ties without  too  great  expectations. 

It  is  true  that  South  America  has  wonderful  cities, 
grand  opera,  fine  race  courses,  beautiful  women,  great 


THE  PEOPLE  AND  THE  COUNTEIES     33 

newspapers,  and  a  culture  older  than  our  own.  Lima 
and  Buenos  Aires  were  founded  nearly  one  hundred 
years  before  the  Pilgi'ims  landed  on  Plymouth  Eock. 
Kio  de  Janeiro  and  Santiago  are  more  than  one  hun- 
years  older  than  Xew  York. 

Yet  the  South  American  countries  are  also  very 
young.  Their  independence  dates  back  only  a  century, 
and  their  political  stability  less  than  that,  where  they 
have  attained  it.  It  has  been  the  diplomatic  fashion 
with  us  to  coddle  Latin  America.  We  have  heard  the 
many  nice  things  that  can  honestly  be  said  about  its 
capitals,  fashion,  hospitality,  cosmopolitanism,  litera- 
ture, patriotism.  But  other  things  have  not  been  said 
— its  backwardness  in  education,  living  conditions, 
sanitation,  opportunity  and  earning  power  of  the 
masses. 

Three  fourths  of  the  South  Americans  are  country 
and  jungle  dwellers,  living  on  the  gi'ound  or  in  the 
bush,  with  a  few  sticks,  palm  leaves,  blocks  of  dried 
mud  or  scraps  of  sheet  iron  for  a  house,  a  few  gourds 
and  earthen  pots  to  cook  in,  and  a  few  bundles  of  rags 
for  clothes  and  bed.  The  Argentine  herder  and  agri- 
cultural laborer  lives  on  meat,  hard  bread  and  mate, 
or  Paraguay  tea.  Very  often  he  is  a  Spanish  or  Ital- 
ian peasant,  without  family,  farming  rented  land  in 
wheat  or  barley  for  a  few  years,  living  roughly  in  a 
temporary  shack.  With  luck,  he  cleans  up  a  few  thou- 
sand dollars  in  three  to  five  years,  leaving  the  land  in 
alfalfa.  Then  his  shack  is  pulled  down,  and  he  re- 
turns to  Spain  or  Italy,  marrying  and  really  beginning 


3^         BUSmESS  IN  SOUTH  AMERICA 

to  live.     WTiile  he  is  making  his  pile,  he  is  not  much 
of  a  customer  for  imported  goods. 

In  Brazil  the  same  migratory  system  has  been  fol- 
lowed in  planting  coffee  for  the  great  landowners. 
Aside  from  this  one  dominant  cultivated  crop,  Brazil's 
products  are  chiefly  things  that  can  be  gathered  wild, 
like  rubber,  Brazil  nuts,  vegetable  ivory,  vegetable 
wax — real  farming  has  hardly  begun. 

In  other  countries  the  Yankee  is  constantly  running 
onto  living  conditions  that  alter  his  views  of  South 
America  as  a  market. 

A  large  force  of  Uruguayan  laborers  was  employed 
in  a  new  meat  packing  plant  in  Montevideo.  The 
American  contractor  had  to  shut  them  all  outside  the 
gi'ounds  at  night,  for  otherwise  they  would  have  cover- 
ed the  place  with  shacks  and  shelters,  sleeping  on  the 
sodden  soil.  They  were  splendid  workers,  bu!t  ac- 
customed to  only  the  most  primitive  living  conditions. 

Peru  and  Bolivia  have  nearly  the  population  of  New 
England.  But  more  than  two  thirds  of  the  people  are 
Indians,  living  at  high  altitudes  in  the  Andes,  isolated 
in  their  mountain  huts,  and  cultivating  potatoes  on 
their  ancient  terraced  plots.  They  will  go  barefoot 
through  the  snow,  and  sleep  on  ice. 

An  American  engineer  carrying  out  a  contract  in 
Chile  pointed  to  a  frame  shed  resembling  one  of  the 
section  houses  in  which  our  railroad  trackmen  keep 
tools.  "Six  people  live  and  sleep  there,"  he  said,  "and 
it  hasn't  even  a  window!" 

Pine  men  in  many  ways,  the  Argentine  herder,  Uru- 
guayan gaucho,  Chilean  roio  and  Peruvian  cholo — 


THE  PEOPLE  AKD  THE  COUNTRIES      35 

strong,  hard,  industrious,  uncomplaining.  To  know 
them  is  to  wish  them  hotter  things  to-morrow,  hut  to- 
day they  live  under  pioneer  conditions,  without  roads, 
schools,  pure  water  supply,  sewers  and  other  essentials 
that  we  provide  for  ourselves  first  of  all,  and  instinc- 
tively. 

The  Yankee  who  goes  to  South  America  to  sell  goods 
soon  sees  the  other  side  of  our  future  trade — that  we 
must  huy  as  well  as  sell,  provide  markets  for  more 
products,  help  develop  the  countries  hy  investing  in 
railroads  and  raise  the  standard  of  living  and  expendi- 
ture hy  increasing  the  earning  power  of  the  masses. 

There  are  several  reasons  for  South  America's  back- 
wardness in  material  things.  One  is  the  survival  of 
the  European  system  of  landowners  and  peasants.  Our 
continent  was  populated  largely  hy  opening  govern- 
ment land  to  sturdy  immigi-ants,  the  cream  of  northern 
Europe.  But  South  American  countries  have  been 
developed  hy  great  landowners,  drawing  upon  Southern 
Europe  for  laborers  rather  than  settlers.  Opportuni- 
ties for  the  immigrant  have  been  far  less  numerous. 
This  is  the  real  reason,  in  the  writer's  opinion,  why 
South  America  has  not  grown  in  population,  though 
constantly   pleading   ^TmmigTation,    immigration!" 

Another  handicap  is  lack  of  local  taxation  on  land, 
and  the  local  initiative  growing  out  of  it  which  makes 
local  improvements.  It  we  want  a  schoolhouse  or  a 
waterworks  we  hold  a  town  meeting  and  agree  to  tax 
ourselves.  We  not  only  get  the  desired  improvement, 
but  the  process  is  educational.  South  Americans  have 
still  to  learn  this  way  of  going  to  school  for  the  benefit 


36         BUSINESS  IN  SOUTH  AMEKICA 

of  the  communitj.  Thej  seldom  carry  out  local  im- 
provements themselves,  but  look  to  the  national  or 
provincial  government  to  take  the  initiative.  The  latter 
may  do  the  job  in  a  splendid  way  when  it  gets  round 
to  it,  but  progress  is  usually  slow. 

Popular  education  is  a  constitutional  right  of  citi- 
zens in  many  of  the  South  American  countries.  But 
as  yet  it  is  largely  a  paper  privilege,  because  schools 
are  lacking,  or  too  expensive  for  the  masses,  and  the 
amount  of  illiteracy  is  great. 

There  is  a  bright  side  to  the  picture,  however.  The 
more  enterprising  governments  are  planning  schools, 
sanitation,  highways  and  other  improvements.  Dis- 
satisfaction is  spreading  among  the  people,  and  will  be 
a  factor  making  for  better  things  for  the  coming  genera- 
tion. In  criticizing  we  must  remember  that  we  are 
likely  to  contrast  the  other  fellow's  worst  with  our  best, 
which  is  unfair.  "We  forget  his  difficulties  in  financing 
improvements  for  people  who  have  not  yet  learned  to 
help  themselves.  We  forget  the  slums  that  can  be 
found  in  our  own  mountain  and  farming  sections. 
Certainly  our  school  system  is  better,  but  there  must 
be  room  for  improvement  when,  as  shown  by  recent 
investigation,  several  million  American  school  children 
do  not  get  enough  to  eat. 

An  American  woman  visited  a  hospitable  family  in 
one  of  the  southernmost  countries  during  the  chill  win- 
ter. The  house  was  not  heated,  and  its  thick  walls 
radiated  dampness.  On  the  parlor  floor  she  saw  what 
seemed  to  be  a  sofa  pillow,  and  picked  it  up,  placing 
it  on  the  sofa.    Her  hostess  entered,  and  threw  it  back 


THE  PEOPLE  AND  THE  COUNTRIES      37 

on  the  floor — it  was  a  foot  wanner,  universal  in  that 
country  during  the  winter.  Furs,  padded  garments 
and  chilblains  in  winter,  heat  and  dust  and  flies  in 
summers,  these  are  accepted  as  inevitable.  Cooking 
arrangements  are  primitive,  servants  are  treated  prettj' 
much  like  domestic  animals.  Perhaps  we  have  gone  too 
far  in  the  other  direction,  made  comfort  a  fetish,  and 
are  paying  too  much  for  it  in  energy  and  life.  But 
the  South  American's  interest  in  comfort  is  gi'owing, 
and  capable  of  being  cultivated,  for  as  a  i-ule  one  need 
not  show  him  a  thing  twice. 

Politically  the  South  American  countries  are  all 
republics,  some  with  constitutions  modeled  upon  our 
ovm,  and  some  with  improvements.  Actually,  how- 
ever, they  are  autocracies  for  the  time  being.  A  few 
political  bosses,  lawyers,  landowners  or  aristocratic 
families  manipulate  the  governments,  selecting  presi- 
dents and  cabinets.  Hardlv  one  citizen  in  a  hundred 
votes,  sometimes  because  he  lacks  the  franchise  through 
poverty  or  ignorance,  and  again  because  the  poll  tax  is 
prohibitive. 

The  system  is  not  so  much  bad  as  immature.  First 
came  independence  for  people  not  permitted  to  govern 
themselves  even  in  business  matters.  Then  followed 
internal  struggles  between  factions  for  power,  and  grad- 
ual attainment  of  political  stability.  Now  most  of 
the  countries  are  slowly  developing  political  conscious- 
ness, public  opinion,  community  spirit  and  other  ele- 
ments of  older  democracies. 

In  the  main,  South  American  government  is  auto- 
cratic,  but  benign  and   constructive.      To  sit  in   the 


38         BUSmESS  m  SOUTH  AMEEICA 

ruler's  cliair  and  dictate  is  one  thing,  but  to  plan  water- 
works and  sewers  for  all  your  provincial  towns,  put  a 
bill  tbrougb  the  legislature,  and  find  the  money,  is 
another.  Every  one  of  tbe  Soutbem  republics  has 
its  administrative  difficulties — debt,  unstable  currency, 
diminished  credit,  past  mistakes  in  finance,  local  fac- 
tions and  jealousies.  The  ruling  class  is  made  up  of 
educated  men,  many  of  them  anxious  to  carry  out 
broad  national  developments,  and  showing  a  decided 
trend  toward  better  men  and  better  administration. 
Their  chief  shortcoming  is  lack  of  technical  knowledge 
— most  of  them  have  been  educated  in  law,  where  en- 
gineers, administrators  and  business  men  are  needed. 
The  legal  "Doctor"  is  so  prevalent  in  South  American 
affairs  as  to  be  almost  humorous. 

As  an  example  of  the  system  at  its  best,  take  the  prisr 
ons  of  Uruguay.  Some  years  ago  this  little  republic's 
rulers  decided  to  have  the  latest  thing  in  prisons,  with 
improvements.  An  eminent  judge  was  directed  to  lay 
out  plans.  He  investigated  prisons  in  the  United 
States  and  Europe,  and  erected  great,  clean,  healthy 
buildings.  If  you  go  to  prison  in  Uruguay — the  writer 
met  several  American  prisoners  there — you  are  paid 
wages  for  your  work.  The  amount  is  forty  cents  a  day. 
Ten  cents  is  deducted  for  food  and  clothing,  ten  cents 
to  pay  your  fine,  ten  cents  for  spending,  and  ten  cents 
saved  for  you  until  discharge.  The  prisons  are  under 
the  Ministry  of  Public  Instruction.  You  can  learn 
a  trade  while  serving  your  sentence.  There  is  an  eight- 
hour  work  day  during  which  you  make  furniture,  metal 
work,  shoes,  clothing  or  equipment  for  playgrounds  and 


THE  PEOPLE  A:tTD  THE  COUKTRIES      39 

schools,  mostly  utilized  by  the  government.  The  three 
Wa  can  be  studied  in  night  classes,  with  drawing  and 
designing.  Yoiu'  design  for  a  book-case  or  iron  grill 
can  afterward  be  worked  out  in  the  shops.  Framed 
exposition  awards  for  prison  products  hang  in  the  work 
room.  In  one  institution  prisoners,  starting  with  three 
hundred  dollars  capital,  built  up  a  tilemaking  business 
which  has  grown  to  a  $5,000  investment,  and  were 
eagerly  investing  a  cash  surplus  in  hydraulic  presses. 

South  American  democracy  has  not  developed  re- 
finements like  women's  suffrage,  because  male  suffrage 
is  still  far  from  universal.  To  extend  the  vote,  politi- 
cal education  is  needed,  and  the  slow  growth  of  public 
opinion  and  a  middle  class.  As  has  been  pointed  out, 
we  will  have  grounds  for  criticism  when  we  have  solved 
our  own  problem  of  negro  suffrage.  Neither  has  it 
developed  control  and  oppression  by  organized  minor- 
ities, so  it  has  the  longcomings  of  its  shortcomings. 

There  are  two  distinct  sides  to  Latin  American  cour- 
tesy. 

It  is  true,  as  our  advisors  have  told  us  in  advance, 
that  the  people  pay  more  attention  than  ourselves  to 
graceful  formalities.  Men  take  off  their  hats  to  each 
other,  execute  wonderful  bows,  kiss  ladies'  hands.  You 
are  assured  that  everything  your  host  possesses  is  your 
own.  "No  one  would  think  of  laughing  at  your  blun- 
dering Spanish — ''We  laugh  at  the  Peruvian's  mis- 
takes," said  a  gentleman  of  fun-loving  Lima,  ''but  at 
the  foreigner,  never!  We  listen  and  try  to  under- 
stand." 

On  meeting,  and  before  discussing  business  or  any- 


40         BUSINESS  m  SOUTH  AMEKICA 

thing  else,  certain  polite  questions  are  in  order.  Simi- 
lar formalities  are  in  order  when  parting. 

An  American  engineer  employed  an  interpreter  in 
Buenos  Aires.  They  had  finished  work  one  afternoon, 
and  he  was  going  to  his  hotel  in  a  taxicah.  The  inter- 
preter stood  outside,  hat  in  hand,  saying,  ^^My  compli- 
ments to  your  lady,  my  compliments  to  your  daughter, 
my  many  thanks,  my  sincere  wishes  for  your  health," 
and  so  on.  The  American,  hat  in  hand,  was  thanking 
him  and  returning  compliments  in  Latin  form,  but 
somewhat  nervously.  Eor  a  trolley  car  had  come  up, 
the  taxi  was  blocking  the  track,  and  the  motorman  and 
chauffeur  were  exchanging  compliments  of  a  different 
kind.  However,  the  motorman  had  to  wait  until  the 
caballeros  had  observed  the  civilities. 

Straight  down  to  the  humblest  peon  these  courtesies 
Cixtend.  Sometimes  the  blunt  Yankee  is  ill  at  ease, 
and  resents  taking  off  his  hat  to  men  and  doing  business 
in  left-handed  ways.  But  more  often,  stepping  into 
this  atmosphere,  he  likes  it,  and  finds  himself  picking 
up  the  Latin  manner. 

But  it  is  all  partly  ritualistic,  and  may  be  carried  too 
far.  Keep  your  hat  off  too  servilely,  and  you  annoy 
the  other  fellow,  who  wants  to  put  his  on  again  because 
he  is  bald.  It  is  a  courtesy  for  friends  and  superiors, 
ignoring  the  stranger  and  the  subordinate.  There  is 
a  good  deal  of  boorish  staring  and  jostling  on  the 
streets  of  South  American  cities. 

The  South  American  likes  our  direct  way  of  deal- 
ing, and  our  informality.  When  visiting  the  United 
States  he  is  very  often  wounded  because  his  accent 


THE  PEOPLE  A:N"D  THE  COU:^rTRIES     41 

lumps  liim  in  with  tlie  "foreigners."  But  he  also  finds 
a  genuine  kindliness  under  our  binisque  hurry.  As  we 
enjoy  his  formal  politeness,  so  he  enjoys  our  direct 
practicality — ^because  it  is  different. 

IsTow  we  have  taken  a  discount  off  all  the  good  things 
anticipated  in  South  American  civilization.  Or  maybe 
it  is  simply  correcting  the  focus. 

Eortunately,  there  is  a  discount  off  all  the  unfavor- 
able things  tliat  may  have  been  anticipated. 

^'Revolution"  is  the  most  widespread  notion  about 
South  America  in  the  Xorth  American  mind.  We 
have  Mexico  at  our  back  door.  Uncle  Sam  has  taken 
a  hand  from  time  to  time  in  Cuba,  Haj'ti,  Santo  Do- 
mingo and  Central  American  countries. 

The  Latin  American  revolutionist  has  become  a 
stock  figure  in  our  fiction,  and  many  of  us  have  got 
from  novels  our  single  piece  of  misinformation  about 
South  America.  But  it  is  not  fiction  or  theory  with  all 
of  us,  for  Americans  have  invested  many  millions  in 
Mexico,  and  perhaps  one  in  a  thousand  has  a  direct 
knowledge  of  revolution  measurable  in  lost  property,  to 
say  nothing  about  loss  of  American  lives.  Other  Latin 
American  countries  are  now  asking  us  for  capital.  They 
are  politically  stable,  but  not  all  of  them  as  stable  as 
Mexico  when  we  put  our  money  into  its  railroads, 
mines,  oil  wells.  Mexico  overshadows  our  more  recent 
and  very  profitable  investments  in  Cuba. 

Revolutions  have  not  been  frequent  in  the  larger 
South  American  countries  since  they  attained  their 
stability  following  independence.  Eirst  the  yoke  of 
Spain  was  thrown  off,  leaving  the  countries  with  mili- 


42         BUSIE^ESS  IN  SOUTH  AMERICA 

tary  leaders  and  armed  bands,  wlio  turned  and  fought 
each  other  for  power.  In  Argentina  this  transition 
period  lasted  until  the  fifties,  when  the  dictator  Rosas 
was  overthrown,  since  when  there  has  been  no  real 
revolution.  In  Chile,  there  has  been  only  one  revolu- 
tion since  that  of  Balmaceda  in  1893.  Uruguay 
has  the  most  troubled  history  of  all  the  major 
countries,  but  her  last  revolution  dates  back  to  1904. 
Peru  has  had  a  troubled  history,  too,  but  her  many  revo- 
lutions have  been  small  affairs,  fights  between  factions, 
not  affecting  the  people  except  in  retarding  develop- 
ment of  the  country.  Brazil  has  had  no  revolution 
since  independence  was  gained  thirty  years  ago.  Ven- 
ezuela, Colombia,  Ecuador  and  Paraguay  have  suffered 
most  from  political  disturbances. 

Yet  in  the  opinion  of  the  writer  there  is  danger 
ahead  for  practically  all  the  South  American  repub- 
lics. Politics  tend  to  simmer  down,  but  economic  and 
social  unrest  is  plainly  developing  among  the  masses. 
The  average  Latin  American  ^^revolution"  reported  by 
the  newspapers  is  usually  a  small  disturbance  com- 
pared to  one  of  our  strikes,  hardly  affecting  the  man 
in  the  street.  But  economic  unrest  will  affect  everybody, 
for  it  reflects  the  desire  of  the  masses  for  better  living 
conditions.  The  more  advanced  the  country,  the  near- 
er it  is  to  this  transition  stage.  Had  the  recent  labor 
riots  in  Argentina  been  reported  as  a  revolution  they 
would  have  taken  on  the  aspect  of  civil  war.  It  is 
argued  that  the  size  of  the  leading  South  American 
countries  makes  for  stability.  But  Mexico  is  large — 
larger  than  any  Latin  American  country  except  Brazil 


THE  PEOPLE  AND  THE  COUNTRIES     43 

and  Argentina.  Eevolution  is  being  supplanted  by  evo- 
lution. It  is  reassuring,  however,  to  find  in  most  of 
these  countries  public-spirited  administrators  and  in- 
tellectuals who  are  thoroughly  alive  to  the  need  for  im- 
proving the  conditions  of  the  masses. 

Our  second  most  widespread  notion  about  the  South 
American  is  that  he  is  an  Indian,  and  a  ragged  little 
one,  as  shown  in  our  cartoons. 

Color  in  South  America  is,  for  us,  an  important  busi- 
ness matter.  We  have  our  own  color  problem.  We 
have  white  people,  born  in  sections  where  that  problem 
is  most  acute,  whose  feelings  on  the  subject  are  very 
strong.  In  South  America  it  is  often  necessary  to  do 
business  with  people  of  mixed  blood,  and  to  meet  them 
socially.  Therefore,  to  send  business  representatives 
who  will  not  accept  the  unchangeable  conditions  is — 
not  good  business.  Personal  feeling  does  not  enter  into 
the  equation  at  all.  The  right  man  must  be  selected, 
and  his  wife  must  also  be  free  of  prejudice.  The  wrong 
selection  for  South  America  would  be  just  like  select- 
ing as  London  or  Dublin  representative  an  Irish 
American  wdth  strong  feeling  on  the  Irish  question. 

Our  color  problem  involves  whites  and  negToes. 
South  America's  problem  is  of  a  different  hue.  Only 
three  countries  on  the  Southern  continent  have  ne- 
groes at  all — Brazil,  Colombia  and  Venezuela.  They 
number  about  13,000,000.  Negro  slavery  was  re- 
sorted to  on  a  large  scale  only  in  Brazil.  The  black 
population  of  Colombia  and  Venezuela  comes  from  the 
West  Indies.  There  is  a  fringe  of  mulattos  along 
the  Brazilian  border  in  northern  Uruguay.    A  negro  is 


44         BUSmESS  m  SOUTH  AMEEICA  1 

almost  a  curiosity  in  Argentina,  and  along  the  whole 
West  Coast,  where  Indian  labor  was  abundant  in  Span- 
ish times.    If  a  negTO  drifts  in,  and  he  is  especially  big 
and  black,  they  dress  him  in  a  gorgeous  uniform  and      1 
put  him  at  the  front  door  of  a  hotel. 

There  are  nearly  as  many  fuU-blooded  Indians  in 
South  America  as  there  are  whites — 11,000,000  In- 
dians to  15,000,000  whites.  On  top  of  that,  there  are 
15,000,000  mestizos,  or  people  of  mixed  white  and  In- 
dian blood. 

There  is  a  color  line  among  South  Americans,  but 
not  so  distinct  as  our  own.  The  mixtures  of  blood  are 
more  complex.  Indians  range  all  the  way  from  wild 
forest  tribes  in  Brazil,  Peru  and  Bolivia,  up  to  the  mes- 
tizo doctor,  lawyer  or  architect  with  a  Parisian  educa- 
tion. And  the  wild  forest  Indian  may  have  a  skin 
lighter  than  that  of  the  educated  mestizo.  Then,  Latin 
courtesy  has  removed  many  of  the  contrasts  in  oui*  own 
color  problem,  both  among  the  Indians  and  negroes. 

To  know  something  of  the  South  American  tribes 
from  whom  many  of  the  people  have  descended,  is  to 
feel  no  more  prejudice  on  the  color  question  than  one 
would  feel  about  our  ISTorth  American  Indians. 

For  example,  up  in  northernmost  Brazil  is  a  little 
state  called  Ceara.  It  was  settled  by  Portuguese  noble- 
men who  made  alliances  with  Indian  chiefs,  married 
their  daughters,  raised  enormous  patriarchal  families. 
To-day,  Ceara  is  populated  largely  by  descendants  of 
a  few  ^^first  families."  The  country  is  fertile,  but  cursed 
with  recurring  droughts.  When  his  state  dries  up, 
the  Cearanese  penetrates  to  other  parts  of  Brazil,  and 


THE  PEOPLE  AND  THE  COUNTRIES  45 

wherever  he  goes  development  follows.  He  is  the 
Scotchman  of  Brazil  and  without  him  the  Amazon  rub- 
ber country  would  still  be  unexplored,  much  less  pro- 
ductive. 

In  Chile  a  person  of  mixed  hlood  may  have  in  his 
veins  some  of  the  qualities  of  the  Araucanian  Indians, 
a  tribe  that  produced  at  least  two  first-rate  military 
leaders,  Caupolican  and  Lautaro,  and  resisted  the 
Spaniards  for  more  than  t^vo  centuries.  The  Chilean 
is  the  Yankee  of  South  America,  and  one  feels  his 
"pep"  immediately.     That  "pep"  may  be  Araucanian. 

Then  the  countrjTaen  of  Argentina  and  Uruguay. 
When  wild  cattle  were  killed  for  their  hides,  the  Ar- 
gentino  enlisted  the  wild  Indians  and  mestizos  of  the 
counti'v  as  cowbovs.  These  workers  lived  in  the  sad- 
die,  on  meat  alone,  killing  a  cow,  and  cooking  their 
beef  in  the  hide  with  the  bones  as  fuel.  This  hardy 
gaucho,  under  San  Martin,  won  South  America's  inde- 
pendence. Incidentally,  he  cleared  Argentina  of  wild 
tribes.  He  was  a  poet,  a  guitar  player,  an  improvisor 
of  music,  and  a  romantic  fellow  all  around.  When  the 
Argentines  began  to  fence  their  herds  and  raise  wheat, 
he  rode  over  the  horizon  like  our  own  cowbovs,  and  dis- 
appeared — but  left  the  mark  of  his  race  behind. 

In  Peru,  Bolivia  and  Ecuador  there  has  been  less 
mixture  of  the  races,  but  the  population  of  Indians  is 
largest — the  patient  subjects  of  the  Incas,  who  sub- 
mitted to  their  socialistic-autocracy,  and  are  the  same 
hard-headed  conservatives  to-day.  In  the  Central 
American  countries  the  bulk  of  the  population,  Indian 
and  mestizo,  is  of  Maya  blood,  that  race  which  left  the 


46         BUSmESS  IN  SOUTH  AMEEICA 

only  written  language  in  what  is  now  Latin  America, 
and  the  only  sculpture  and  real  art.  Like  the  Incas, 
it  is  conjectured  that  these  works  were  those  of  a  kingly 
and  priestly  caste,  which  was  killed  off  hy  the  Span- 
iards, leaving  only  the  ignorant  peasantry,  as  in  Peru. 

We  are  a  mixed  race,  and  vigorous  on  that  account, 
but  a  white  mixture.  South  America  is  developing  a 
mixed  race,  too,  and  it  may  be  one  of  unexpected 
energy  and  strength.  The  Spaniard  and  the  Portu- 
guese were  obliged  to  blend  with  other  colors,  for  lack 
of  white  population.  The  result  is  a  red  or  copper- 
colored  race  which  seems  to  be  better  adapted  to  the 
continent,  with  its  tropical  area,  than  an  all-white 
blend.  What  is  nature  up  to  in  South  America  ?  White 
skins  are  a  recent  fashion.  The  civilizations  of  yes- 
terday were  of  other  hues — India,  Egypt,  Phoenicia, 
Carthage,  the  Moors,  the  Arabs.  White  prevails  in  but 
two  of  the  five  continents.  It  may  be  an  ethnological 
interlude. 

JSTot  everybody  takes  this  view,  of  course.  It  is  held 
that  modern  science  will  enable  the  white  man  to  live 
in  the  tropics,  that  white  immigration  will  develop 
South  America,  and  that  the  energy  of  the  white  races 
will  make  it  impossible  for  the  mixed  races  to  com- 
pete. Maybe  so.  The  chief  thing  for  us  now  is  to 
accept  the  South  Americans  as  they  are — if  one  be 
prejudiced,  then  the  Southern  continent  is  no  place  for 
him  to  do  business. 

Another  outstanding  belief  held  by  many  Americans 
is,  that  the  people  of  South  America  are  a  declining 
race,  going  out  with  Spain.     We  get  that  view  from 


THE  PEOPLE  ANTf  THE  COUNTRIES     47 

our  histories,  just  as  we  get  a  prejudice  against  the 
Britisli  from  school  history  "redcoats''  of  Revolution- 
ary times.  We  are  wrong  about  the  redcoats,  and 
wrong  about  the  South  Americans.  It  is  not  certain 
that  Spain  is  declining — she  has  been  up  and  down 
through  the  centuries  beyond  the  dawn  of  history.  The 
South  Americans  (and  this  includes  the  Brazilians) 
are  a  different  race,  facing  the  future,  not  the  past. 
The  best  statement  about  their  vigor  and  future  is  that 
of  Father  Zahm: 

The  Spaniards  and  their  nearest  of  kin,  the  Portuguese, 
nothwithstanding  their  being  so  long  "the  apparent  sport  of 
malicious  and  inconstant  fortune,"  contain  within  themselves 
the  promise  and  the  potency  of  a  renascence  that  will  soon 
surprise  the  world.  Never  before  in  their  long  and  marvelous 
history  have  they  been  more  progressive  or  more  powerful. 
Never  were  their  sanamus  tongues  so  widely  spoken,  or  by  a 
larger  number  of  people  than  at  present.  Never  did  they 
rank  higher  or  approach  nearer  towards  universal  use  among 
the  great  languages  of  the  world.  Omitting  the  peoples  and 
tongues  of  China,  and  of  Russia,  which  is  more  than  half 
Asiatic,  the  Spanish  race  and  tongue  to-day  are  surpassed  in 
point  of  numbers,  distribution  and  future  promise  only  by 
the  Anglo-Saxon. 

To  the  great  Iberian  races  belongs  the  whole  of  the  western 
hemisphere  from  the  northern  frontier  of  Mexico  to  the  straits 
of  Magellan.  This,  with  its  possessions  in  Europe,  Asia,  and 
Africa,  constitutes  more  than  one-fourth  of  the  earth's  surface. 
No  other  race  since  the  fall  of  Rome,  except  the  Anglo-Saxon, 
has  achieved  more  in  conquest  and  colonization  or  has  contrib- 
uted more  to  the  advancement  of  ci\^lization  and  culture.  A 
composite  race,  like  the  Anglo-Saxon,  and  possessing  some  of 
the  strongest  elements  of  the  English  people,  it  is  a  race  of 
inexhaustible  %^tality  and  possesses  a  boundless  field  for  future 
expansion  and  development.  Great  as  has  been  its  past  and 
mighty  and  manifold  as  have  been  its  influence  and  achieve- 


48         BUSEsTESS  IJST  SOUTH  AMEEICA 

ments  in  every  sphere  of  activity,  its  future  will  be  still 
greater.  Indeed,  the  Neo-Latin  race,  now  advancing  with 
isuch  marvelous  strides,  bids  fair  soon  to  become  a  close  rival 
of  the  noble  Anglo-American  race  in  the  grdlat  republic  of 
the  north. 

Anybody  who  thinks  that  Soutli  Americans  are  lack- 
ing in  vigor  should  see  them  in  action  wlien  something 
rubs  them  the  wrong  way.  At  an  opera  in  Rio  de  Jan- 
eiro the  management  changed  thie  program  without  no- 
tice, substituting  for  a  popular  opera  an  assortment  of 
single  acts  from  several  different  works.  An  Amer- 
ican audience  would  have  sat  througli  the  show  with- 
out complaint — what  is  the  use  of  complaining?  But 
the  outraged  Brazilian  audience  rose  and  walked  out 
in  protest.  If  the  bulls  in  the  plaza  at  Lima  are  too 
tame  to  fight,  the  audience  immediately  begins  setting 
fire  to  the  grand  stand,  and  demands  its  money  hack. 

Thinking  of  South  America  in  terms  of  history  and 
romance,  we  picture  its  people  as  swashbuckling  cava- 
liers and  guitar-playing  trouhadours.  Actually,  it  is 
peopled  by  Latin  Yankees. 

The  continent  was  conquered  chiefly  hy  caballeros 
from  the  Southern  provinces  of  Spain.  But  when  it 
came  to  working  its  resources  there  was  emigration 
from  the  !N'orthem  provinces — Galicia,  and  Asturias, 
and  the  Basque  regions  running  over  into  France.  Nor- 
thern people  and  southern  people  are  pretty  much  the 
same  the  world  over.  Beside  the  knightly,  indolent  An- 
dalusian,  the  Gallego,  Asturiano  and  Basque  are  as  the 
"New  England  Yankee  to  the  Kentucky  Colonel  or  Geor- 
gia cracker.     The  Asturianos  and  Gallegos  kept  Span- 


THE  PEOPLE  AISTD  THE  COUNTRIES      49 

ish  nationality  alive  when  the  Moors  swept  up  from 
the  South — an  old  game  to  them,  for  in  their  rugged 
northwestern  provinces  they  had  eluded  successive 
conquests  of  Iberian,  Celt-Iberian,  Phcenician,  Cartha- 
genian,  Poman,  Vandal,  and  Goth.  The  Southern 
Spaniard  from  Andalusia,  Sevilla,  Valencia  and  Estre- 
madura  is  self-possessed,  debonair  and  voluble.  But 
the  Gallego,  Asturiano  and  Basque  are  self-conscious, 
rugged,  laconic.  The  Southern  Spaniard  was  the  con- 
queror and  politician,  while  the  ^N^orthern  Spaniard 
followed  as  colonist,  trader,  artisan,  banker  and  plodder 
generally.  ...^^^ 

They  said  that  God,  hurrying  to  get  through  the  v^ 
creation  of  the  world,  made  the  Northern  Spaniard 
late  Saturday  night,  and  hadn't  time  to  finish  him,  so 
he  is  brainy  but  uncouth,  full  of  honest  merit,  yet 
awkward  in  manner.  Also  that  when  he  bargains  with 
you,  you  get  everything  the  hen  laid  except  the  egg. 
Wo  already  have  our  own  Yankee  proverb  about  him — 
^^He  is  there  with  nothing,  and  strong  with  that!"         ^' 

All  over  Spanish  America  progress  and  prosperity^ 
keep  pace  with  him.  Our  best  customers,  like  Argen- 
tina and  Uruguay,  enjoyed  immigration  from  the 
Xortheim  provinces  while  the  Southern  Spaniards  were 
absorbed  by  Peru.  Uruguay  is  almost  a  Basque  prov- 
ince. Latin  American  independence  was  won  by  eight 
liberators.  Seven  of  them  came  from  north  Spanish 
stock,  and  the  eighth  was  of  Flemish  descent.  The 
Spanish  crown  tried  to  monopolize  its  American  colon- 
ies by  embargos  on  their  trade  and  production.  It 
might    better    have    put    an    embargo    on    emigration 


60         BUSmESS  m  SOUTH  AMEKICig 

from  the  Bay  of  Biscay,  from  whence  came  the  libera- 
tors. In  Brazil,  too,  one  finds  the  Portuguese  Yankee, 
cannilj  conservative,  sticking  to  the  line  he  has  set 
for  himself  in  business,  bargaining  shrewdly,  saving 
his  money,  and  enlisting  his  relatives  and  friends  to 
monopolize  a  given  field. 

Sensitiveness  is  an  outstanding  trait  of  South  Amer- 
icans. Where  we  say  "Business  is  business,"  the  Latin 
is  guided  by  his  amor  propioj  or  self-esteem,  self-re- 
spect, honor.  Convince  an  American  that  his  way  of 
doing  a  thing  is  inefficient,  or  something  that  he  uses 
in  his  work  is  out  of  date,  and  you  have  laid  the  foun- 
dation for  selling  him  something  better.  But  the 
\y  South  American  would  be  hurt  by  such  an  argument, 
\  taking  it  as  a  personal  reflection  upon  himself.  Asked 
to  show  how  he  does  a  thing,  and  then  given  a  demon- 
stration of  something  better,  without  comment,  as 
simply  another  method,  he  would  see  the  point,  go 
away,  think  it  over,  and  presently  place  his  order.  Sen- 
sitiveness may  lead  him  to  do  so  indirectly.  This  sen- 
sitiveness gives  Americans  no  trouble  when  understood. 
It  is  partly  racial,  and  partly  the  sensitiveness  of 
young  countries — we  had  it  ourselves  three  generations 
ago,  and  bitterly  resented  criticism  or  patronage  by  an 
older  country  like  England. 

Eamily  plays  a  tremendous  part  in  South  American 
affairs.  Instead  of  the  loosely-knit  American,  British 
or  German  family,  which  scatters  with  maturity  and 
marriage,  often  by  choice,  South  American  families  are 
still  patriarchal  in  their  size,  and  their  bonds  of  re- 
lationship.     Anniversaries,    partings,    greetings    after 


THE  PEOPLE  AND  THE  COUNTRIES     51 

al)sence,  tidings  from  members  wlio  are  in  distant  re- 
gions, and  the  family  joys,  sorrows  and  thrills  gener- 
ally, are  shared  down  to  remote  cousins.  Discreet  in- 
quiries about  members  of  the  family  are  always  good 
etiquette,  and  little  presents  and  attentions  are  much 
prized.  Our  curt  ^'Business  is  business"  makes  the 
mingling  of  office  and  family  affairs  seem  odd,  but  in 
South  America  they  blend  naturally,  and  interest  in 
the  family  of  one's  customer,  who  is  also  one's  friend, 
is  taken  as  a  mark  of  good  heartedness  and  simpatico. 
The  South  American  not  only  sets  great  store  by  his 
culture,  but  it  enters  into  his  daily  life.  The  asser- 
tion that  it  is  superior  to  our  own,  and  that  we  Yan- 
kees are  therefore  barbarians,  seems  to  come  chiefly 
from  South  American  journalists  and  demagogues. 
Among  average  intelligent  Latins  there  is  a  frank  ad- 
miration for  the  material  and  inventive  progress  that  is 
our  "culture"  mainly.  Really,  the  two  things  are  just 
different.  South  America's  development  has  not  yet 
reached  the  industrial  or  scientific  stage.  Its  intellec- 
tuals have  centered  their  mental  energy  on  literature, 
art,  architecture.  These,  with  politics,  have  been  the 
great  "indoor  sports."  France  has  been  the  intellec- 
tual mother,  and  South  American  poetry,  novels,  phi- 
losophy, criticism  and  the  like  reflect  the  changing  move- 
ments among  the  writers  and  artists  of  France,  with 
a  tendency  to  be  ten  years  or  more  behind  the  move- 
ment that  stirs  Paris  to-day.  This  culture  has  pro- 
duced books  which,  while  reflecting  life  in  the  different 
countries,  are  hardly  literature.  The  Great  South 
American  Novel  has  still  to  be  written,  like  our  own 


52         BUSIKESS  IN  SOUTH  AMERICA 

Great  American  Novel.  Absorption  in  the  culture  of 
an  old  country  has  blinded  South  Americans  to  the  very 
different  needs  of  a  new  continent.  To-day  they  real- 
ize this,  and  there  is  a  new  tendency  toward  engineer- 
ing, scientific  agriculture  and  practical  studies.  Eng- 
lish is  replacing  French  in  popularity  as  the  intellec- 
tual language  of  every  educated  South  American,  and 
students  are  being  sent  in  increasing  numbers  to  the 
United  States  and  England. 

'Tipping'^  assumes  grand  proportions  in  South 
America,  and  by  the  advice  of  those  having  the  great- 
est experience,  must  be  taken  into  account  in  doing 
business. 

Porters  are  provided  at  the  customhouse  to  help 
you  in  the  inspection  of  baggage.  A  placard  warns 
against  tipping  them.  But  your  fletero,  or  baggage- 
man, suggests  "They  are  so  poorly  paid,  senor!"  It  is 
the  truth.  You  hand  him  fifty  centavos  for  the  porter. 
Arriving  at  the  hotel  you  learn  that  all  the  rooms  are 
gone — ^until  a  couple  of  dollars  leads  the  clerk  to  look 
again  and  learn  that  he  was  mistaken.  You  must 
take  the  popular  ''Luxo''  train  for  the  night  ride  to 
another  city.  A  bei-th  ?  A  ticket  ?  Impossible,  senor ! 
But  a  tip  in  the  right  quarter  secures  a  reservation. 
And  the  system  often  runs  right  up  into  high  adminis- 
trative quarters,  where  a  judicious  ' 'honorarium"  from 
the  man  who  knows  lands  the  contract,  to  the  bewilder- 
ment of  the  man  whose  bid  was  lower,  but  who  didn't 

know. 

You  are  told  that  it  is  "the  custom  of  the  country,^' 
that  you  cannot  change  it,  and  must  conform  if  you  want 


THE  PEOPLE  AND  THE  COUNTKIES      53 

to  do  business.  Occasionally  an  indignant  Yankee  tries 
to  change  it,  and  succeeds,  as  in  the  case  of  one  who  had 
been  appointed  to  public  office  in  one  of  the  republics. 
A  native  friend  offered  him  a  handsome  tip  for  a  con- 
tract. The  Yankee  fell  in  with  the  offer  in  so  far  as 
securing  evidence  was  concerned,  and  then  had  the  tip- 
per sent  to  jail  under  the  laws  of  that  country.  Quite 
legal,  and  right — but  so  unsportsmanlike,  sehor — so 
contrary  to  custom  and  courtesy ! 

It  is  true  that  salaries  and  wages  are  low,  and  that 
people  have  come  to  consider  tips  a  legitimate  part  of 
their  earnings.  It  is  also  true  that  foreigners  have  en- 
couraged the  system.  The  Germans  improved  upon 
it  in  many  unsavory  ways,  but  nobody's  hands  are 
clean.  It  is  also  true  that  tipping  is  not  always  as 
necessary  as  one  might  be  led  to  believe,  that  it  takes  an 
intimate  knowledge  of  the  countries  to  know  when  to 
tip  and  when  to  withhold,  and  that  the  general  ten- 
dency in  South  America  is  toward  straight  business — 
something  novel  to-day,  yet  coming  surely,  if  slowly. 

'^Indeed,  there  are  brilliant  examples  of  contracts  ob- 
tained and  concessions  developed  by  American  firms," 
testifies  an  American  engineer  of  wide  experience  on  the 
southern  continent,  ^'without  the  corrupt  expenditure  of 
a  single  penny,  and  these  stand  as  a  credit  to  both  the 
South  American  governments  concerned  and  the  Amer- 
ican contractors  or  concessionaires." 


CHAPTEK    IV 

THE   TOOLS  OF  THE  TRADE— OUR  OWN  BANKS 

Yesterday,  we  did  business  in  South  America  with, 
borrowed  tools.  Our  goods  were  carried  in  foreign 
ships,  paid  for  through  foreign  banks,  distributed  bj 
foreign  merchants.  If  a  new  customer  turned  up  in 
Buenos  Aires,  we  had  no  way  of  gauging  his  responsi- 
bility, except  through  foreign  channels,  and  though  he 
might  be  an  excellent  credit  risk,  we  had  to  ask  him 
for  cash  in  advance.  If  he  wanted  capital  to  extend 
his  business,  we  had  the  money,  but  no  investment  ma- 
chinery, so  he  went  to  foreign  lenders. 

Did  this  worry  us  then  ? 

'Not  at  all ! 

^^It  is  cheaper  to  use  the  other  fellow's  tools,"  we 
said.  "He  can  operate  ships  better  than  Americans. 
What  difference  does  it  make  whether  our  money  is 
collected  by  a  British  or  a  German  bank,  so  long  as 
we  get  it?'' 

Congress  was  particularly  stiff-necked,  refusing  to 
modify  antiquated  laws  so  that  American  ships  and 
American  banks  abroad  would  be  possible. 

To-day,  thanks  to  the  eye-opening  war,  we  realize 
that  our  own  tools  are  absolutely  necessary  in  world 
trade,  and  are  gradually  getting  them. 

54 


TOOLS  OF  TRADE— OUR  BAIsTKS         55 

Our  banks  have  been  foremost  in  enterprise.  They 
began  establishing  branches  abroad  during  the  war, 
when  experienced  employees  speaking  two  languages 
were  scarce,  and  had  to  be  trained,  and  were  drawn  into 
the  Army  just  when  they  became  efficient.  There  is  a 
chain  of  our  banks  right  around  South  America,  grow- 
ing with  the  gi'owth  of  our  trade,  and  also  growing  into 
the  confidence  of  South  Americans. 

The  sight  of  our  flag  appearing  once  more  in  for- 
eign harbors  gives  one  its  thrill,  l^o  less  significant  to 
an  American  should  be  the  signboards  of  American 
banks  in  the  financial  centers  of  the  Southern  continent. 
The  first  financial  institution  progi-essive  enough  to 
open  up  shop  on  the  broad  Avenida  Rio  Branco  in  Rio 
de  Janeiro  was  an  American  branch  bank.  Two  Amer- 
ican branch  banks  face  each  other  in  the  Buenos  Aires 
financial  district.  If  one  has  a  little  imagination,  it  is 
even  more  impressive  to  find  three  American  bank  men 
and  a  stenographer  just  opening  up  in  Lima,  which  hap- 
pened when  the  writer  was  there — by  great  good  luck 
they  had  found  working  quarters  in  two  hotel  rooms  in 
the  underbuilt,  crowded  ^'City  of  the  Kings." 

When  you  sell  goods  to  a  Latin  American,  almost  in- 
variably you  must  lend  him  the  money  to  pay  for  them 
or  help  him  boiTow  it  elsewhere.  His  country  is  rich 
in  natural  resources,  but  "capital  poor."  The  goods 
he  buys  of  you  will  be  weeks  on  the  ocean,  and  he  sells 
them  to  counti-y  customers  on  long  credit,  as  in  our  own 
Southern  and  Western  states.  He  cannot  finance  the 
business  himself.  If  he  had  enough  money  to  do  that 
he  could  put  it  out  at  interest  and  live  without  work- 


56         BUSmESS  m  SOUTH  AIVIEKICA 

ing!  Virtually,  lie  earns  Ms  living  hj  making  other 
people's  money  work.  The  average  American  manu- 
facturer cannot  finance  him  tying  up  working  capital 
for  months  at  a  time.  Some  of  our  large  corporations 
have  been  able  to  do  this,  but  it  is  beyond  the  power  of 
the  smaller  and  growing  concerns  who  should  be  de- 
veloping Latin  American  outlets  for  the  future. 

The  right  way  to  finance  such  a  sale  is  through  a 
bank  which  will  lend  the  money  on  a  bill  of  exchange 
for  several  months,  taking  its  profit  in  the  form  of  a 
discount  which  is  figured  into  the  price  of  the  goods. 
Sometimes  this  bill  is  brought  from  the  American  manu- 
facturer by  a  bank  in  the  United  States.  Again,  it  is 
forwarded  to  the  Latin  American  customer  for  collec- 
tion, and  he  borrows  the  money  from  a  bank  in  his  own 
country. 

!N'ow,  formerly,  if  he  purchased  British  goods  there 
was  a  British  bank  in  his  city,  probably  several  of 
them,  and  German,  French,  Italian  and  Spanish  banks. 
Even  the  little  industrial  countries,  like  Holland,  and 
Belgium,  with  the  business  sagacity  that  has  made 
their  per  capita  exports  the  largest  in  the  world,  had 
branch  banks  around  the  corner  ready  to  lend  him  flor- 
ins or  francs. 

But  there  was  no  Yankee  bank,  and  the  purchase  of 
dollars  to  pay  for  Yankee  goods  was  often  difficult. 
Foreign  banks  sold  exchange  in  dollars,  but  the  rat^j  on 
London  in  pounds  sterling  was  often  more  favorable, 
a  more  stable  bank  commodity,  due  to  the  volume  of 
British  commerce,  its  more  diversified  character,  and  a 
century  of  experience  in  dealing  with  London.     Pur- 


TOOLS  OF  TRADE— OUE  BANKS         57 

chases  of  American  goods  miglit  be  paid  for  by  turn- 
ing pesos  into  British  pounds  and  sending  the  manu- 
facturer his  money  by  the  triangular  London  route. 

Branch  banks  in  world  markets  render  various  other 
services  than  collecting  drafts,  buying  bills  of  ex- 
change and  transferring  money. 

One  of  the  most  important  is  the  gathering  of  credit 
information  about  business  concerns  in  the  territory 
where  they  operate.  To  know  just  who  is  financially 
sound,  and  to  what  extent,  and  who  is  otherwise,  makes 
for  safety.  It  also  makes  for  facility  and  flexibility. 
Banks  are  usually  in  the  best  position  to  gather  such 
information,  and  on  the  completeness  of  the  credit  data 
secured  by  their  branch  banks,  the  British,  German  and 
other  nationalities  were  able  to  extend  their  sales  in 
Latin  America.  Such  information  is  costly.  It  is  con- 
stantly changing.  The  banks  of  each  nationality  re- 
garded it  as  confidential,  a  valuable  asset  in  the  busi- 
ness of  the  banks  and  its  home  countries. 

Some  foreign  banks  extend  their  credit  information 
to  all  customers,  regardless  of  nationality.  But  others 
have  been  known  to  use  such  information  for  selfish 
national  ends.  Upon  no  point,  perhaps,  are  business 
men  engaged  in  world  trade  more  sensitive  than  this — 
of  real  or  fancied  discrimination  in  the  matter  of  in- 
formation. Suspicions  that  it  is  being  withheld  or  im- 
parted to  others  in  violation  of  confidence  constantly 
crop  up  in  markets  abroad,  and  create  friction.  For 
this  reason,  American  banks  are  of  service  to  American 
trade  in  more  ways  than  one. 

Given  strong,  impartial,  native  banks,  or  branches  of 


58         BUSINESS  IN  SOUTH  AMEEICA 

foreign  banks,  some  autliorities  maintain  that  affiliations 
with  such  institutions  are  as  effective  as  branches  of 
American  banks.  Some  of  the  large  London  banks, 
together  with  the  Bank  of  Montreal,  p-refer  strong 
affiliations  to  a  branch  system. 

Another  kind  of  information  that  banks  can  use  in 
world  trade  to  the  disadvantasre  of  rival  nations  is  that 
obtainable  from  shipping  documents.  An  American 
manufacturer  sells  goods  to  a  Brazilian  importer.  A 
draft  is  drawn  upon  the  latter  and  forwarded  to  a  bank 
in  Rio  de  Janeiro  for  collection.  The  draft  is  accom- 
panied by  a  bill  of  lading,  and  perhaps  an  invoice,  that 
show  just  what  the  Brazilian  has  bought  from  the  Yan- 
kee— kinds  of  goods,  quantities!,  and  so  forth.  Such 
information  may  be  damagingly  suggestive  to  un- 
scrupulous competitors  if  it  leaks  out  of  the  bank.  Busi- 
ness men  insist  that  it  does  leak  out,  to  the  advantage 
of  competitors  of  other  nationalities.  Banks  deny  this, 
and  proof  of  violation  of  confidence  is  seldom  forth- 
coming. The  important  point  is,  that  business  men 
jealously  guard  such  particulars,  and  if  documents  do 
not  pass  through  banks  of  other  nationalities,  the  in- 
formation cannot  be  disclosed  by  them. 

With  their  entry  into  world  markets,  our  own  branch 
banks  established  a  new  kind  of  information  service 
which  is  characteristically  American.  They  organized 
commercial  departments  to  gather  every  kind  of  in- 
formation likely  to  extend  our  trade,  realizing  that 
their  own  banking  business  can  only  grow  as  we  in- 
crease our  sales  to  purchases  from  and  investment  in 
other  countries.     We  are  the  latest  arrivals  in  South 


TOOLS  OF  TEADE— OUK  BANKS         59 

America,  from  the  banking  standpoint.  Formerly  our 
trade  there  was  financed  through  European  banks, 
whicli  charged  us  more  for  exchange  than  their  o\vn 
countrjTDen,  very  often.  Exchange  on  ^N'ew  York,  for 
example,  might  be  one  per  cent  higher  than  on  London. 
In  banking  commissions  alone,  it  is  said,  British  banks 
got  five  to  ten  cents  a  bag  on  all  coffee  we  bought  from 
Brazil,  with  tidy  profits  on  Argentina's  wool,  Uru- 
guay's hides,  Chilean  nitrates,  Peruvian  cotton.  When 
we  set  up  our  own  banks  in  those  countries,  naturally, 
we  couldn't  take  the  Britisher's  business,  nor  supplant 
the  Italian,  French  or  other  European  banks.  We  had 
to  have  business  of  our  own,  and  the  only  way  to  get  it 
was  to  make  it.  We  were  doing  a  big  volume  of  war 
business  then,  but  that  wouldn't  last  forever.  Indeed, 
it  began  to  shrink  gi'ievously  when  peace  adjustments 
lowered  the  exchange  value  of  British  and  European 
money,  for  then  the  South  American  pesos  would  buy 
more  pounds  or  francs  than  dollars,  and  consequently 
more  goods.  We  had  to  provide  for  the  future.  So 
our  banks  set  up  these  commercial  departments  to  serve 
Americans  who  wanted  information  about  South  Amer- 
ican resources,  investment  possibilities,  openings  for 
new  industries,  and  the  like,  and  to  furnish  information 
about  American  business  houses  or  products  to  the 
South  American.  They  go  to  almost  any  length  in 
making  themselves  useful  to  the  traveling  American 
business  man,  reserving  hotel  rooms,  receiving  and 
forwarding  his  mail,  furnishing  interpreters.  For  it  is 
assumed  that  the  traveling  American  will  increase  our 
trade,  and  that  the  more  agreeable  travel  is  made,  the 


60         BUSINESS  m  SOUTH  AMEKICA 

more  Americans  will  visit  tlie  Southern  continent.  A 
good  deal  of  information  gathered  by  these  commercial 
departments  is  published  in  bulletins  for  distribution 
in  the  United  States,  and  handbooks  are  also  issued, 
giving  suggestions  about  the  shipments,  financing  and 
diversified  technicalities  of  business  in  the  different 
countries. 

Even  with  our  branch  banks  in  all  South  American 
centers,  two  factors  hamper  both  the  American  business 
man  and  the  American  banker.  One  is  routine,  and 
the  other  is  prejudice. 

Routine  may  be  illustrated  thus:  A  manufacturer 
in  one  of  our  inland  factory  towns  begins  exporting  to 
South  America.  His  customers  are  a  few  importers 
down  there  who  are  entirely  responsible,  and  he  arran- 
ges satisfactory  credit  terms  with  them.  All  he  has 
to  do  now  is  put  his  draft  through  a  bank  with  the 
shipping  documents  when  he  sends  goods.  There  may 
be  only  one  bank  in  his  little  factory  town.  All  his 
fijiancial  business  is  done  with  that  bank.  He  puts  his 
South  American  drafts  through  as  a  matter  of  routine, 
just  like  his  checks.  The  bajik  has  no  South  American 
connections.  It  passes  the  drafts  along  to  a  ISTew  York 
bank,  which,  in  turn,  may  have  no  South  American 
branches  or  connections.  Ultimately  the  draft  turns  up 
in  South  America  to  be  collected  through  the  organiza- 
tion of  a  foreign  bank,  and  so  our  American  banks  lose 
'  the  business,  and  the  opportunity  to  render  service,  be- 
cause the  manufacturer  has  followed  routine  instead  of 
investigating  American  banks  with  real  South  Amer- 


TOOLS  OF  TRADE— OUR  BANKS         61 

ican  connections,  and  ascertaining  what  they  can  do  for 
him. 

Fully  half  the  Americans  sent  to  the  Southern  con- 
tinent on  business  errands  carry  foreign  letters  of  cred- 
it, simply  because  their  concerns  at  home  are  buried 
in  routine,  and  take  the  letter  of  credit  supplied  by 
their  regular  bank,  though  it  is  probably  foreign. 

There  is  an  advantage  in  carrying  an  American  letter 
of  credit,  as  thousands  of  our  tourists  stranded  in  Eu- 
rope at  the  outbreak  of  the  war  learned  when  foreign 
letters  of  credit  were  worthless  for  the  time  being,  in 
days  of  panic,  and  money  could  be  obtained  only 
through  an  Amei'ican  express  company,  which  faith- 
fully stood  behind  its  credit  documents.  And  there 
are  advantages  in  collecting  drafts  through  American 
banks  abroad — little  adjustments  and  courtesies  that 
please  one's  customers  by  giving  them  advantages  in 
fluctuations  of  exchange,  the  opportunity  to  inspect 
goods  before  taking  up  drafts,  and  so  on.  One  of  the 
first  steps  in  entering  upon  South  American  trade,  or 
even  thinking  about  it,  is  to  break  routine — investigate 
our  new  banking  facilities  and  plan  banking  connec- 
tions accordingly. 

Prejudice  against  American  banks  takes  various 
forms.  The  Yankee  in  South  America  watches  daily 
fluctuations  of  exchange  as  a  new  kind  of  excitement, 
and  frequently  gambles  on  the  rise  and  fall  of  the  peso 
or  milreis.  Different  banks  often  quote  different  rates. 
Let  the  American  bank's  rate  be  a  trifle  higher  this 
morning,  and  it  is  magnified  as  proof  of  inefficiency  or 
greed.    Other  Americans  will  assure  you  that  our  banks, 


62         BUSINESS  m  SOUTH  AMEKICA 

being  new  in  Soutli  America,  lack  tlie  information  and 
experience  possessed  by  foreign  banks  that  have  been 
there  for  years.  There  is  also  prejudice  against  Amer- 
ican banks  because  they  have  been  allied  with. 
trading  corporations,  and  it  is  believed  that  in- 
formation taken  from  documents  will  be  used  for 
competitive  purposes.  Finally,  there  is  preju- 
dice against  our  lai'gest  chain  of  branch  banks  on  the 
suspicion  that  it  is  a  "trust,''  which  suggests  a  brief 
outline  of  our  world  trade  banking  connections  in  gen- 
ea*al. 

Let  us  go  back  to  the  draft  put  into  the  local  bank 
by  the  manufacturer  in  an  inland  factory  town.  By 
following  it  through  several  channels  we  will  get  a 
glimpse  of  American  banking  abroad.  If  blind  routine 
governs,  probably  it  will  be  turned  into  the  banking  or- 
ganization of  some  other  country.  But  if  his  local 
bank,  or  some  city  bank  through  which  it  deals,  has 
been  enterprising  in  the  matter  of  world  trade,  it  will 
be  handled  in  other  ways. 

First,  it  may  be  handled  by  a  bank  belonging  to  an 
association  without  branches  in  South  America,  but 
maintaining  correspondents  there  in  the  chief  cities. 
These  correspondents  may  be  foreign  banks,  but  in 
some  cas€s  they  are  Americans.  Such  associations  of 
banks,  and  also  some  individual  banks  with  their  own 
correspondents  abroad,  have  been  very  enterprising  in 
encouraging*  world  trade  and  facilitating  its  financial 
routine  for  the  manufacturer.  But  their  chief  effort 
has  been  at  home,  and  in  the  opinion  of  impartial  au- 


TOOLS  OF  TKADE— OUK  BANKS         63 

tliorities  tlicy  have  still  mucli  room  for  improvement  iu 
their  connections  abroad. 

Second,  the  manufacturei-'s  draft  may  find  it3  way 
to  a  bank  in  a  city  like  Boston,  which  buys  millions  of 
dollars'  worth  of  Argentina's  wool  and  hides,  and  which 
has  had  business  enough  to  establish  its  own  branch 
in  a  single  citv,  like  Buenos  Aires. 

Third,  there  is  the  bank  big  enough  to  establish 
branches  in  all  the  capitals  of  South  America,  and 
sub-branches  in  the  lesser  cities.  This  takes  money,  or- 
ganization and  faith — so  much  of  them  that  only  one 
city  in  the  United  States  has  enough  world  trade  to 
justify  it,  and  only  one  banking  institution  in  that  city 
has  had  the  means  and  courage  to  set  up  shop  all  over 
the  world  in  advance  of  gTOwth  in  our  world  business. 
This  single  bank  is  our  largest  financial  institution, 
next  to  the  United  States  Treasury.  It  has  many  rami- 
fications through  the  American  business  world,  and 
is  especially  identified  with  big  corporation  finance.  So 
Americans  abroad  often  view  it  suspiciously.  At 
home  it  is  regarded  as  a  ^'trust"  serving  the  ^Hrusts," 
abroad  its  branches  may  look  like  tentacles  of  the 
octopus,  and  the  business  man  pitted  against  gi-eat  cor- 
porations at  home  fears  that  the  use  of  this  banking 
organization  will  draw  him  into  the  toils.  ^\\\\  time, 
service  and  experience  of  this  banking  organization,  it 
is  to  be  hoped  that  prejudice  will  disappear.  The  bank 
is  certainly  working  hard  and  spending  money  to  con- 
solidate and  increase  American  world  trade. 

Our  remedy  for  tnist  control  being  competition,  it 
is  reassurinoj  to  know  that  the  other  two  kinds  of  bank- 


64         BUSINESS  m  SOUTH  AMEEICA 

ing  connections  are  thriving.  The  single  bank  that 
reaches  out  from  Boston,  or  New  Orleans,  or  wliicli- 
ever  point  may  have  developed  trade  in  particular  prod- 
ucts, opens  a  branch  in  Buenos  Aires  or  Sao  Paulo, 
and  finds  that  straight  banking  is  profitable,  and  war- 
rants branches  in  Rio  de  Janeiro.  And  the  association 
of  banks  that  starts  with  correspondents  in  South  Amer- 
ica and  vigorous  promotion  of  world  trade  interest  in 
the  United  States  may  ultimately  grow  to  tbe  point  of 
establishing  its  own  branches  on  the  Southern  conti- 
nent. In  any  event,  the  American  business  man  selling 
abroad  can  take  his  choice  of  American  banking  con- 
nections. 

The  first  item  of  bank  business  in  South  Amei'ica 
is  one  that  would  look  strange  to  the  bank  man  at 
home.  That  is  exchange,  rooted  in  the  export  and  im- 
port trade  of  the  different  countries.  The  inland  bank 
teller  in  the  Corn  Belt  would  probably  be  unable  to 
understand  the  daily  balance  sheet  of  a  South  American 
branch  bank,  because  it  deals  with  pesos,  pounds,  dol- 
lars, francs  and  other  currencies,  converted  into  each 
other  at  varying  rates  of  exchange.  An  American  branch 
bank  manager  in  Chile  pointed  out  to  the  writer  one 
item  in  the  daily  balance  that  represented,  as  nearly 
as  ho  could  explain  it,  profit  and  loss  from  the  over- 
lapping of  different  currencies  too  small  to  be  figured 
on  individual  transactions. 

"There  is  no  way  of  getting  that  item  off  the  books/' 
he  said. 

According  to  the  stability  of  currency,  a  country's 
purchases  and  sales  abroad,  or  even  the  arrival  of  sev- 


TOOLS  OF  TRADE— OUR  BAI^KS         65 

eral  ships  the  same  day,  with  goods  and  drafts,  the  ex- 
change rate  rises  or  falls.  If  the  ships  come  from 
England,  merchants  need  funds  to  take  up  London 
drafts,  and  the  local  value  of  the  pound  sterling  rises, 
while  perhaps  the  dollar  falls.  Next  week  big  ship- 
ments arrive  from  the  United  States  and  the  dollar 
stiffens.  These  fluctuations  mean  profit  or  loss  to  the 
importer  who  must  buy  pounds  or  dollars  with  his  pe- 
sos. Sometimes  the  option  of  taking  up  drafts  within 
a  week,  instead  of  the  day  they  are  presented,  will  save 
him  a  tidy  sum  in  exchange,  and  sellers,  who  under- 
stand that,  grant  such  options  to  responsible  customers, 
giving  special  instructions  to  the  bank  that  collects 
their  draft.  Fluctuations  in  exchange  usually  mean 
profit  to  the  bank,  because  it  is  selling  and  buying  the 
different  currencies,  with  an  ample  "split"  between  the 
selling  and  buying  prices.  Exchange  is  so  profitable  to 
banks,  in  fact,  that  bankers  sometimes  keep  their  rates 
confidential  by  "gentlemen's  agreement." 

Another  source  of  bank  earnings  is  deposits  of  South 
American  business  houses.  Simply  to  hang  out  the 
sign  of  an  American  bank  in  the  big  business  centers 
of  the  continent  attracted  deposits.  On  the  day  that 
the  American  bank  in  Rio  de  Janeiro  moved  into  new 
quarters,  celebrating  with  champagne  and  cakes,  sev- 
eral hundred  new  accounts  were  opened,  practically  all 
new  business  taken  from  no  other  bank. 

"Walk  down  the  street  with  me  to  the  American 
•bank,"  said  a  Montevideo  importer  to  a  Yankee  sales- 
man. 


66         BUSINESS  IE"  SOUTH  AMEEICA 

"So  yon  bank  witli  ns  Yankees,  eh?"  asked  tlie 
American. 

"I  bank  witb  evei-ybody,"  was  tbe  reply.  "For 
American  purchases  with  the  Yankees,  for  British  trade 
with  the  London  branch  bank  and  likewise  the  French, 
Italians,  Spaniards.  And  for  np-conntry  business  here 
in  Uruguay,  with  the  bank  of  the  Republic." 

In  contrast,  there  is  an  interesting  illustration  of  our 
own  provincialism  in  banking  matters.  A^  the  financial 
center  of  the  United  States,  I^ew  York  City  has  many 
branches  established  by  foreign  banks — ^British, 
Canadian,  Australian,  South  African,  French,  Italian, 
Dutch,  West  Indian,  Japanese,  Chinese,  the  great 
British  banks  in  South  America.  Under  the  banking 
law  of  ISTew  York  State,  these  branches  are  not  per- 
mitted to  conduct  an  ordinary  deposit  business.  This 
law  was  evidently  passed  with  the  idea  of  preventing 
competition  with  our  own  banks.  Experience  in  Lon- 
don and  other  financial  centers  shows  that  a  policy  of 
freedom  to  foreign  branch  banks,  far  fromt  hurting 
home  financial  institutions,  simply  facilitates  and  in- 
creases world  trade  by  providing  new  capital.  "Now 
that  we  have  learned  this  by  establishing  our  own 
branch  banks  abroad,  and  with  the  possibilities  of  re- 
taliation against  our  own  banks  in  other  countries,  steps 
are  being  taken  to  change  the  law. 

The  daily  routine  of  Latin  American  banking  differs 
in  some  ways  from  our  own.  Checks  are  not  used  as 
extensively,  but  the  American  banks  are  encouraging 
them,  and  through  teamwork  with  legislators  have 
improved  the  laws  relating  to  checks  in  some  of  the 


TOOLS  OF  TRADE— OUK  BANKS   '^T 

countries.  An  importer  paying  duties  at  the  customs 
house  may  draw  out  cash  for  the  purpose.  The  bank 
teller  counts  it,  the  importer  counts  it,  the  customs 
house  counts  it,  and  it  goes  back  to  the  bank  to  bo 
counted  again.  Thus  hundreds  of  people  are  busy 
counting  money  and  carrying  it  about,  when  a  check 
would  reduce  all  that  work  to  simple  bookkeeping  en- 
tries. The  South  Americans  are  beginning  to  see  the 
economy  of  the  check.  Cancelled  checks  are  not 
returned  to  the  depositor,  but  kept  by  the  bank,  accord- 
ing to  law,  to  be  produced  by  court  order  if  litigation 
arises.  The  cost  to  the  bank  of  storing  millions  of 
checks  is  a  serious  item  of  expense.  A  check  presented 
for  payment  over  the  counter  is  not  paid  directly,  with 
a  cheery  ^'Good  morning,"  as  in  the  United  States,  but 
is  scrutinized  by  one  teller  for  balance,  and  another 
for  genuineness  of  signature,  and  paid  by  a  third  teller. 
The  payee  is  given  a  numbered  brass  tag  as  a  receipt 
for  his  check,  and  waits  five  to  ten  minutes  for  the 
money.  Some  items  which  we  handle  quickly  over  the 
counter,  such  as  the  sale  of  drafts  and  payments  on 
letters  of  credit,  are  spread  over  several  hours.  Papers 
are  made  out  in  another  department,  and  the  customer 
drops  in  again  for  his  draft  or  money.  Latin  America's 
banking  routine  is  really  European,  and  offers  many 
opportunities  for  speeding  up,  labor-saving  machinery 
and  automatic  safeguards.  The  American  banks  have 
introduced  many  of  these  short  cuts,  but  at  the  same 
time  find  that  routine  cannot  be  changed  too  fast. 

Personality  enters  into  Latin  American  bankinc^  to  a 
greater  degree  than  our  o^vn.     There  is  little  govern- 


68         BUSmESS  IN  SOUTH  AlIEEICA 

ment  reflation  of  banks  as  we  know  it.  Friendship 
enters  into  business  everywhere.  Latin  American  conn- 
tries  are  all  hungi-y  for  credit  and  capital.  Longer 
chances  are  taken  in  extending  loans  and  credit,  with 
correspondingly  higher  interest,  and  family  connections 
and  character  often  count  more  as  security  than  col- 
lateral. Therefore,  the  bank  man  who  rises  to  execu- 
tive position  will  know  practically  every  man  of  promi- 
nence in  the  community,  and  probably  family  life 
aif airs  as  well.  Li  countries  of  sparse  population  where 
the  banking  may  involve  the  inspection  and  sale  of  soil 
products  as  well  as  advances  on  crops,  and  maybe 
mining  or  other  operations,  the  banker  and  his  execu- 
tive assistants  will  be  personally  acquainted  with  people, 
localities  and  conditions  throughout  a  good-sized  re- 
public. 


CHAPTEK  V 

THE  TOOLS  OF  THE  TRADE— OUR  OWN  SHIPS 

An  American  traveling  man  luncliing  at  a  manufac- 
turers^ club  related  an  incident  which  had  come  under 
his  own  observation  in  one  of  the  West  Coast  ports  of 
South  America.  That  coast  has  no  docks.  Freight  is 
discharged  from  ships  into  lighters  in  open  roadsteads, 
often  in  a  rough  sea.  The  great  depth  of  water  makes 
port  construction  difficult.  Virtually,  all  freight  is 
landed  on  a  mountainside.  A  shipment  of  delicate 
American  optical  apparatus  was  swung  overside,  and 
several  tons  of  steel  bars  dropped  on  top  of  it,  smashing 
the  boxes  of  optical  goods. 

^'The  significant  thing  for  me/'  concluded  the  trav- 
eler, "was  the  nationality  of  that  ship — it  belonged  to 
a  country  which  is  our  most  formidable  competitor  in 
such  apparatus." 

"By  Jove!"  exclaimed  a  listening  manufacturer. 
"Maybe  that  explains  why  we  have  had  so  much  break- 
age in  our  shipments  of  vacuum  bottles  to  the  South 
American  market.  I  never  thought  about  the  nation- 
ality of  the  ships  before!" 

If  a  farmer  in  Oregon  or  Iowa  took  his  apples  down 
to  the  railroad  station  for  shipment  to  New  York  and 
saw  train  after  train  stop  to  load  wheat,  wool  and  hogs, 

69 


70         BUSmESS  m  SOUTH  AMEEICA 

but  never  find  room  for  Ms  apples,  so  that  they  rotted 
in  the  boxes  and  barrels,  the  Interstate  Commerce  Com- 
mission would  hear  from  him — quick.  But  because 
he  has  not  realized  that  ocean  transportation  is  just  as 
important  as  railroad  service,  his  apples  have  often 
been  left  on  the  dock  in  American  ports  served  only  by 
foreign  steamships. 

If  wholesale  merchants  in  Chicago  and  St.  Louis 
invited  retailers  in  Texas  to  come  and  inspect  goods 
twice  a  year,  and  make  their  purchases,  and  there  was 
fast  train  service  from  Texas  to  Chicago,  with  dining 
and  observation  cars,  while  travel  to  St.  Louis  was  on 
accommodation  trains,  Washington  would  hear  from 
St.  Louis,  naturally.  But  because  we  have  let  foreign 
steamships  monopolize  passenger  travel  from  South 
America  to  the  United  States,  precisely  the  same  situa- 
tion has  confronted  the  South  American  merchant  en- 
terprising enough  to  go  to  market  himself.  As  between 
I^ew  York  and  European  markets,  he  has  had  the  choice 
of  a  way  train  to  our  country  and  a  luxurious  mer- 
chants' limited  to  England,  Germany,  France  or  Hol- 
land. 

For  world  trade  we  need  our  own  delivery  wagons. 

Occasionally  John,  Fritz  or  Ole  may  cany  a  load  of 
bulk  cargo  for  us  at  bargain  prices.  But  they  cannot 
deliver  our  manufactured  goods  as  well  as  we  ourselves, 
and  they  would  be  fools  to  do  so  in  view  of  world  trade 
competition.  Under  certain  conditions  they  become, 
not  common  carriers,  but  rivals. 

At  this  writing,  the  outlook  for  a  real  American 
Merchant  Marine  seems  brighter  than  at  any  period 


TOOLS  OF  TRADE— OUR  SHIPS         71 

since  the  disappearance  of  our  fast  Yankee  clippers 
before  the  Civil  War.  Under  the  Merchant  Marine  Act 
of  1920  (the  ^'Jones  Bill")  American  shipbuilders  and 
shipowners  are  given  exemption  from  Federal  excess 
profits  taxes  for  ten  years,  provided  such  taxes  are  re- 
invested in  the  building  or  purchase  of  additional  ships, 
with  two  dollars  of  new  capital  for  every  dollar  of 
remitted  taxes.  Ship  subsidies  have  long  been  dis- 
cussed in  this  country,  and  generally  opposed  by  the 
people  of  inland  states,  who  have  lacked  contact  with 
salt  water  affairs.  Ship  subsidies  in  other  countries 
are  usually  paid  for  speed,  the  carrying  of  mail,  or 
some  similar  purpose.  A  subsidy  for  speed,  naturally, 
benefits  only  a  few  ocean  greyhounds.  Subsidies  for 
mail  are  confined  to  passenger  lines,  though  these  may, 
of  course,  also  operate  freight  steamers.  But  under  our 
new  Merchant  Marine  Act,  shipbuilders  are  benefited, 
along  with  every  class  of  shipowner.  The  subsidy  is 
paid  for  ability  demonstrated.  The  owner  of  one 
tramp  steamer  can,  if  an  efficient  manager,  put  his 
profits  back  into  the  purchase  of  another  steamer.  By 
this  law,  it  has  been  said,  we  can  practically  build  or 
buy  three  vessels  for  the  cost  of  two  over  a  period  of 
five  years,  and  with  good  management  perhaps  eight 
ships  for  the  cost  of  four  in  the  ten-year  period  allowed 
by  the  law. 

Foreign  shipowners  have  not  only  enjoyed  seventy  to 
ninety  per  cent  of  our  ocean  traffic  since  the  Civil  War, 
but  have  resorted  to  various  unfair  methods  to  monopo- 
lize the  business,  and  cripple  American  ocean  lines. 
^'Fighting  ships"  are  one  familiar  form  of  unfair  com- 


T2         BUSINESS  m  SOUTH  AMEKICA 

petition — the  assigning  of  vessels  on  certain  competitive 
routes  to  carry  freight  and  passengers  at  rates  below 
cost  until  competition  is  killed.  Combinations  of 
ships  with  railroads  have  been  effective  in  some  foreign 
countries.  Pools,  conferences,  port  regulations,  and 
the  like,  have  also  been  used  to  our  disadvantage.  Most 
of  these  competitive  methods  have  been  illegal  under 
our  own  laws.  The  Merchant  Marine  Act  of  1920  is 
still  more  emphatic  in  prohibiting  such  methods  in  the 
operation  of  our  ships,  and  provides  measures  for  meet- 
ing unfair  competition  when  other  nations  resort  to  it. 

We  came  out  of  the  war  with  a  great  merchant 
shipping  plants — ten  million  tons  of  new  steel  steamers 
afloat  or  building.  To  man  them  with  American  officers 
and  crews,  back  them  with  American  capital,  and  put 
them  to  work  under  American  management  in  the 
hauling  of  our  own  exports  and  imports,  required  a 
broad  Merchant  Marine  policy.  This  policy  has  been 
formulated  in  the  present  Merchant  Marine  Act,  pro- 
nounced one  of  the  broadest  measures  of  the  kind  ever 
passed  by  any  nation. 

However,  not  even  ships  backed  by  men,  money  and 
legislation  will  make  a  Merchant  Marine. 

In  the  end,  success  is  a  matter  of  understanding  and 
support  by  the  nation — ^manufacturers,  merchants, 
farmers,  mechanics,  railroad  men,  bankers,  everybody 
engaged  in  production. 

It  has  been  pointed  out  that  if  China  had  as  many 
ships  as  Great  Britain  in  proportion  to  her  population, 
she  would  have  200,000,000  tons,  or  ten  times  as  many 
as  John  Bull.     Of  course,  China  could  not  keep  the 


TOOLS  OF  TEADE— OUK  SHIPS         73 

Britisli  merchant  marine  busy,  for  even  John  Bull  him- 
self cannot  do  that  with  his  own  trade — ho  must  carry 
freight  for  other  countries.  Neither  Brazil  nor  Argen- 
tina would  be  able  to  keep  busy  a  Merchant  Marine 
of  their  own,  because  they  are  agi'icultural  countries, 
with  seasonal  products,  and  their  ships  would  bo 
utilized  in  their  own  trade  only  a  few  months  in  the 
year.  They  are  badly  placed  geographically,  as  com- 
pared with  the  leading  shipping  and  industrial  coun- 
tries, which  lie  at  the  center  of  the  world's  trade  routes. 

A  great  merchant  marine  is  possible  only  for  a  gi-eat 
industrial  and  consuming  country  where  government, 
shipbuilders,  shipowners,  seamen,  manufacturers, 
exporters,  importers  and  merchants  are  more  or  less 
wel>footed,  have  the  sense  of  ships,  and  work  hand  in 
hand  to  keep  them  employed. 

For  example,  freight  rates  from  Europe  to  the  West 
Coast  of  South  America,  through  the  Panama  Canal, 
are  lower  than  from  the  United  States,  though  the  dis- 
tance to  Europe  is  a  couple  of  thousand  miles  greater. 
Foreign  steamship  owners  are  not  prudish  when  it 
comes  to  discrimination  against  a  competitor.  But 
this  is  not  discrimination — that  reduced  rate  is  secured 
by  teamwork  between  foreign  manufacturers  and  ships 
— teamwork  which  we  should  be  doing  ourselves. 

Ocean  freight  rates,  like  those  on  the  railroad,  are 
made  according  to  the  value  and  bulk  of  the  merchan- 
dise. Great  Britain  and  Europe  normally  ship  a  large 
percentage  of  fine  products,  such  as  silk  goods,  laces, 
watches,  jewelry,  wines,  liquoi-s,  cutlery,  pharmaceuti- 
cals, fancy  food  products,  bric-a-brac,  the  "article  de 


74        BUSnSTESS  IN"  SOUTH  AMERICA 

Paris,"  and  thb  like.  On  such  shipments  first-class 
freight  rates  are  charged,  as  they  pay  twice  as 
much  per  ton  as  the  heavier  bulk  freights  carried  under 
second-class  and  third-class  rates.  A  thousand  tons  of 
such  fine  merchandise  goes  far  toward  paying  the  ex- 
penses of  the  voyage,  and  makes  possible  a  correspond- 
ing reduction  of  rates  on  heavier  freight. 

Our  business  with  Latin  America  thus  far  has  been 
chiefly  in  machinery,  steel,  foodstuffs,  lumber,  coal  and 
other  bulk  commodities.  It  averages  nearer  third-class 
than  second.  For  example,  in  the  last  year  of  normal 
trade  before  the  war  our  biggest  sales  to  Chile  were 
fuel  oil,  paint  and  varnish,  measured  in  pesos,  and  after 
that  came  mineral  products,  machinery  and  crude  food- 
stuffs. But  the  biggest  item  of  Chile's  import  pur- 
chases was  textiles,  many  of  them  silks,  laces  and  fine 
garments.  We  sold  her  only  800,000  pesos'  worth  of 
textiles,  while  England  sold  12,000,000  pesos,  Germany 
7,000,000  pesos,  France  2,000,000— even  little  Bel- 
gium beat  us  on  the  fine  stuff ! 

We  need  more  first-class  freight  on  our  ships  to  even 
things  up. 

The  sorts  of  products  that  make  first-class  ocean 
freight  are  much  the  same  as  those  that  comprise  one 
third  of  our  express  shipments  at  home — fine  merchan- 
dise of  every  sort  being  rushed  in  small  lots  to  retailers 
to  replenish  exhausted  stock  and  give  maximum  turn- 
over of  the  merchants'  capital.  It  is  the  sort  of  stuff 
that  calls  for  close  adaptation  to  the  customer's  indi- 
vidual taste,  and  for  salesmanship,  and  service,  and 
consumer  advertising. 


TOOLS  OF  TRADE— OUR  SHIPS    75 

Again,  from  the  shipping  standpoint,  the  East  Coast 
of  South  America  is  a  blind  alley  for  us,  particularly 
in  trading  with  Brazil.  We  send  out  twice  as  much 
tonnage  as  is  available  for  the  return  voyage.  Against 
our  coal,  steel,  cement,  machinery,  railroad  equipment 
and  the  like,  Brazil  sends  us  coffee,  cocoa,  rubber,  hides 
and  skins.  When  European  vessels  carry  our  goods  to 
East  Coast  countries  they  can  load  with  grain  or  meat 
for  Europe,  whereas  we  still  produce  these  foodstuffs 
ourselves,  and  buy  little  abroad.  If  they  bring  back 
a  cargo  of  coffee  to  the  United  States  there  is  no  incen- 
tive to  carry  a  return  cargo  of  our  manufactured  goods 
back  to  Brazil.  It  is  better  business  for  them  to  load 
American  cotton  for  Europe,  to  be  made  up  into  textiles 
and  sold  in  South  America. 

Is  it  not  apparent  that  American  manufacturers,  in- 
creasing their  sales  in  South  America,  can  furnish  the 
teamwork  necessary  to  keep  our  own  ships  running 
down  that  coast,  and  carrying  our  purchases  of 
Brazilian  coffee  and  other  products? 

On  the  West  Coast  conditions  are  exactly  opposite. 
Because  Chile  and  Pei-u  ship  about  two  cargoes  of 
nitrates,  copper  matte  and  other  bulky  products  for 
each  cargo  of  manufactured  goods  they  import,  direct 
cargoes  between  the  United  States  and  those  countries 
are  difficult,  and  foreign  ships  resort  to  triangular 
arrangements  that  put  us  at  a  disadvantage.  Before 
the  war,  the  world's  nitrate  trade  was  largely  controlled 
by  Germany,  and  no  opportunity  was  lost  to  load  the 
German  nitrate  carriers  with  German  goods.  Team- 
work here  seems  to  be  a  job  for  American  nitrate  im- 


76        BUSINESS  IN  SOUTH  AMEEICA 

porters,  fertilizer  manufacturers  and  banks,  making 
the  United  States  a  strong  center  of  the  nitrate  trade, 
to  keep  our  ships  busy. 

The  chief  point  about  South  American  business,  as 
it  strikes  a  Yankee,  is  that  a  wide  margin  exists  for 
speeding  it  up  and  overcoming  distance.  Imported 
goods  cost  South  Americans  too  much  money — fifty  to 
one  hundred  and  fifty  per  cent  above  New  York  retail 
prices.  Part  of  this  cost  is  attributable  to  tariffs  and 
taxes,  some  more  of  it  to  freight  and  insurance,  and 
there  are  liberal  wholesale  and  retail  profits.  But  the 
long  delay  between  order  and  delivery,  the  uncertainty 
of  deliveries,  even  in  normal  times,  and  the  cost  of 
delay  and  uncertainty  in  interest  on  capital,  along  with 
breakage,  shortage  and  other  factors — these  are  the 
items  that  make  the  retail  price  of  imported  commodi- 
ties too  high  for  any  but  the  well-to-do  South  American. 

Most  of  the  products  we  want  to  sell  in  South 
America,  and  in  world  markets  generally,  are  things 
that  require  a  backing  of  service.  If  you  desire,  here 
at  home,  the  latest  fox  trot  for  your  phonogi^aph  or 
player  piano,  or  your  automobile  will  not  run,  you 
simply  telephone  to  a  service  department  somewhere, 
and  it  not  only  takes  care  of  you,  but  thanks  you  for 
the  opportunity.  If  you  ask  for  the  latest  tango  or 
maxixe  in  South  America,  it  may  be  six  months  old, 
and  if  your  automobile  runs  on  two  cylinders  and  three 
legs  you  are  lucky ! 

Now,  in  the  United  States,  this  service  is  based  on 
quick  transportation.  Your  music  dealer  and  garage 
man  can  get  supplies  within  twenty-four  hours  by 


TOOLS  OF  TRADE— OUR  SHIPS         77 

express,  in  most  cases,  if  not  in  a  half  houi-  from  a 
branch  in  their  city.  The  branch,  in  turn,  is  supplied 
by  express  from  the  factory  or  branch  factory. 

More  than  half  the  express  traffic  in  the  United 
States  is  made  up  of  merchandise  traveling  to  retail 
merchants,  mostly  in  small  lots. 

Twenty-five  years  ago  the  retail  merchant  in  the 
United  States  carried  enough  stock  to  supply  his  cus- 
tomers for  a  month  or  more,  and  turned  his  stock 
perhaps  four  to  six  times  a  year.  He  had  to  pay  rent 
for  a  large  store  to  hold  his  merchandise.  To-day, 
thousands  of  successful  retailers  do  business  in  mere 
holes  in  the  wall,  shops  the  size  of  a  front  parlor,  in 
city  streets  where  crowds  are  gi-eatest  and  rents  are 
figured  almost  by  the  square  inch.  There  is  no  room 
to  store  surplus  stock.  Every  night,  through  a  handy 
stock-keeping  system,  replenishment  orders  go  to  manu- 
facturers and  wholesalers,  to  fill  in  missing  sizes,  and 
styles,  and  brands  of  shoes,  collars,  hats,  hammers, 
saws,  cigars,  and  cigarettes.  Stock  is  turned  weekly 
in  many  lines,  and  every  dollar  of  capital  made  to 
work  its  utmost.  And  it  is  all  based  on  quick  transpor- 
tation by  schedule.  The  public  gets  the  benefit  in  rea- 
sonable retail  profit  margins. 

If  American  manufacturers  are  going  to  serve  South 
American  countries  on  the  same  principle — and  this  is 
becoming  as  fundamental  a  principle  of  American 
business  as  quantity  production — then  they  must  have 
express  service  on  the  ocean.  And  they  will  not  get 
such  service  by  dickering  with  foreign  shipo^vners  on 
the  basis  of  cheapness.    They  will  get  it  only  by  routing 


78        BUSUSTESS  IN  SOUTH  AMEEICA 

shipments  by  fast  passenger-and-cargo  steamsliip  lines, 
owned  and  operated  by  Americans  in  their  interest. 

Ships  are  indispensable  tools  in  world  trade.  Like 
banks,  they  render  service  not  obtainable  from  other 
nations.  They  are  extensions  of  our  own  characteris- 
tic way  of  doing  business. 

We  have  made  our  railroads  serve  us  as  the  railroads 
of  no  other  country  could.  We  have  built  one  of  the 
largest  merchant  navies  in  the  world  on  the  Great 
Lakes,  and  have  not  only  service,  but  the  cheapest  freight 
rates  in  the  world.  What  we  have  done  at  home  we  can 
do  abroad  when  we  realize  that  there  is  a  national  job 
of  teamwork  involved.  When  we  tackle  this  job,  then 
South  America  and  North  America  will  be  drawn 
together,  and  freed  from  the  isolation  due  to  our  neglect 
in  the  past. 


CHAPTEK  VI 

THE  TOOLS  OF  THE  TEADE— INVESTMENTS 

South  American  investments  are  an  interesting  story. 
But  the  story  has  two  distinct  angles. 

Look  at  the  investment  opportunities  from  the  out- 
side, and  you  are  pretty  certain  to  be  an  optimist, 
especially  if  you  visit  South  America  itself.  The 
different  countries  need  two  kinds  of  money.  They 
need  long  distance  money  for  government  projects,  rail- 
roads, public  utilities,  highways,  sanitation.  And  they 
need  the  kind  of  money  that  brings  with  it  men  who 
know  how  to  establish  industries,  develop  agi'iculture, 
mines  and  other  resources,  and  personally  see  that  their 
money  works. 

The  countries  are  so  fundamentally  rich! 

"Why,  Brazil  alone  could  buy  any  European  country 
outright  with  her  undeveloped  wealth!"  insists  the 
enthusiast,  enumerating  her  dormant  resources  in  soil, 
minerals  and  forests. 

Then,  there  is  the  example  of  John  Bull,  with  his 
long  record  of  Latin  American  investment.  One  esti- 
mate gives  a  total  of  $5,000,000,000  British  money  for 
the  seventeen  continental  republics.  The  $250,000,000 
interest  paid  in  on  that  capital  yearly  equals  all  our 
South  American  exports  for  a  pre-war  year.    We  have 

79 


80        BUSINESS  IN  SOUTH  AMEEICA 

been  talking  romantically  about  export  trade  alone,  for- 
getting investment.  But  trade  follows  the  dollar  more 
closely  than  the  flag.  What  are  our  bankers  doing? 
Ten  million  dollars'  worth  of  railroads  needed  to  open 
up  an  empire  in  one  of  these  countries,  and  they  hesi- 
tate, while  yesterday  they  put  that  much  money  into 
the  moving  picture  business ! 

But  eventually  you  will  hear  the  inside,  and  become 
pessimistic.  John  Bull's  South  American  investments 
pay  him  less  than  five  per  cent,  and  millions  of  pounds 
have  been  lost  there  by  British,  French,  Dutch  and 
other  investors.  There  are  governments  paying  no  in- 
terest on  national  debts,  and  bankrupt  cities,  railroads 
and  miscellaneous  enterprises.  You  find  that,  while 
the  South  American  himself  believes  in  his  country's 
possibilities,  he  invests  none  of  his  own  money  in  the 
projects  dangled  before  foreign  investors.  The  reason 
is  interesting — ^he  wants  five  per  cent  loans  from  the 
foreigner,  putting  his  own  capital  into  city  property, 
land  and  agi*iculture  at  ten  to  twenty  per  cent, 
1  After  you  have  investigated  both  sides  you  will  take 
I  to  the  middle  of  the  road,  with  confidence  in  the  basic 
riches  and  future  of  South  America,  yet  carefully 
scrutinizing  each  investment  proposition  on  its  merits. 
'With  the  heartiest  good  wishes  for  your  Latin  Ameri- 
can friends,  you  will  always  insist  upon  knowing  where 
you  are  to  get  off. 

'^The  gold  brick  of  the  ages!"  said  an  American 
tramway  manager  referring  to  our  new  interest  in 
Latin  American  investments.  ''These  countries  have 
milked  the  European  investor.    The  latter  has  utilized 


TOOLS  OF  TEADE— INVESTMENTS      81 

his  experience  to  pick  up  most  of  the  good  things. 
Now  they  will  go  after  the  Yankee  dollar  and  the 
Yankee  greenhorn.  Why,  just  the  other  day  Wall 
Street  took  a  municipal  bond  issue  down  here,  and  I'll 
bet  nobody  discovered  what  I  consider  the  most  impor- 
tant factor  in  the  deal.  That  city  hasn't  a  penny  of 
revenue  of  its  own — it  is  controlled  and  financed  by 
the  province,  and  if  the  province  went  broke  the  city's 
bonds  would  be  worthless." 

The  path  of  a  tramway  manager  nowadays,  even  in 
South  America,  is  strewn  with  brickbats.  A  few  days 
later  this  chap's  employees  went  on  a  strike,  so  his 
gloom  was  comprehensible.  What  he  said  about  those 
city  bonds  was  true — but  that  city  has  never  failed  to 
meet  its  obligations,  nor  the  province  either. 

We  can  discount  his  gloom,  believing  better  things 
of  South  America.  Yet  European  bankers  and  inves- 
tors have  learned  many  a  hard  lesson  on  the  Southern 
continent.  They  had  become  wary  before  the  war,  and 
are  even  more  cautious  to-day.  South  America  will 
not  market  gold  bricks  with  them  as  easily  as  in  the 
past.  Nor  will  it  get  European  capital  for  legitimate 
enterprises  at  three  to  five  per  cent,  as  in  the  past.  Our 
bankers  and  investors  will  do  well  to  profit  by  Europe's 
experience. 

The  South  American  has  a  peculiar  way  of  looking 
at  foreign  capital.  In  the  past  there  was  plenty  of 
it,  and  cheap.  He  has  borrowed  it  on  bond  issues,  for 
railroads  and  other  improvements  in  sparsely  settled 
sections,  failing  to  earn  interest  where  enterprises  were 
planned  and  managed  by  himself.     Or  when  foreign 


82         BUSINESS  IN  SOUTH  AMERICA 

investors  were  given  a  monopoly,  and  allowed  to  plan 
and  manage,  lie  has  often  hampered  them  by  restric- 
tions, regulations  and  taxes  that  made  the  enterprise 
"unprofitable. 

The  South  American  wants  the  best  of  everything, 
but  is  not  accustomed  to  keeping  costs. 

A  certain  West  Coast  city  needed  a  railroad  from 
its  harbor.  The  line  was  built  to  operate  by  electricity 
generated  by  internal  combustion  engines  run  with  ex- 
pensive imported  fuel.  American  engineers  pointed 
out  that  this  was  about  the  most  costly  way  of  oper- 
ating that  railroad.  'No  matter — the  South  Americans 
were  proud  because  they  had  their  railroad,  and  nobody 
elsewhere  had  a  railroad  like  it!  Another  city  sud- 
denly desired  a  medical  laboratory.  Equipment  which 
could  have  been  bought  abroad  for  reasonable  prices 
happened  to  be  unobtainable  just  then,  in  war  time. 
No  matter — it  was  made  at  home  by  hand  workers  at 
five  times  the  cost. 

Having  secured  his  foreign  capital,  and  got  his  en- 
terprise running,  the  South  American  often  becomes 
narrowly  patriotic,  and  growls  about  the  ^'foreign  exploi- 
tation" of  his  suffering  country,  and  eggs  his  government 
on  to  regulation  and  restriction.  In  1910,  for  example, 
the  British  investment  in  Argentina's  railroads  was 
$1,450,000,000  and  returned  43^4  per  cent.  By  1918 
the  investment  had  increased  to  $1,900,000,000  and 
the  average  return  dropped  to  3%  per  cent,  and  on 
$210,000,000  there  was  no  return  at  all.  Which  would 
seem  to  indicate  that  ^^exploitation"  works  both  ways. 

Foreign  corporations  and  branch  business  houses  in 


TOOLS  OF  TEADE— INVESTMENTS      83 

some  of  the  South  American  countries  are  systemati- 
cally saddled  with  native  job-holders.  The  family  is 
a  basic  Latin  institution.  Relatives  are  placed  in 
positions  all  the  way  from  presidencies  and  director- 
ships down  to  the  office  boy's  job,  without  much  regard 
for  ability — indeed,  some  of  the  positions  are  frankly 
regarded  as  sinecures  that  involve  little  work  or 
attendance. 

The  European  capitalist  now  favors  a  new  method 
of  investing  his  money  on  the  Southern  continent. 
Formerly  he  was  satisfied  with  a  monopolistic  conces- 
sion for  a  railroad  line,  a  port,  a  public  utility.  To- 
day he  prefers  control  of  operation  instead  of  monopoly, 
with  a  permanent  committee  of  experts  from  home  to 
see  that  the  enterprise  is  conservatively  built  and 
worked.  "Without  casting  reflections  upon  South 
Americans,  it  must  be  said  that  they  lack  experience  in 
development  projects,  that  they  have  often  borrowed 
unwisely  in  the  past,  and  that  even  in  the  more  stable 
countries  changes  of  government  and  policy  are  still 
likely  to  injure  enterprises  financed  with  foreign 
capital. 

On  the  South  Americans'  behalf  it  must  be  pointed 
out  that  unwise  borrowing  in  the  past  has  injured  their 
credit,  retarded  development,  and  cost  them  hundreds 
of  millions.  Borrowing  beyond  their  means  they  have 
been  compelled  to  market  securities  far  below  par  in 
the  side  streets  of  European  financial  centers,  and  pur- 
chasers of  such  securities  have  lost  money  through 
^^frenzied  finance"  as  well  as  the  South  Americans. 
To-day  they  feel  that  they  have  had  "no  end  of  a  les- 


84         BUSmESS  m  SOUTH  AMERICA 

son,"  and  it  has  done  them  no  end  of  good.  Even  the 
smaller  and  poorer  countries  are  making  an  effort  to  cor- 
rect past  mistakes.  And  some  of  the  republics  enjoy 
the  highest  credit,  based  on  financial  scrupulousness. 

An  excellent  story  is  told  about  Chile: 

Chile's  only  revolution  since  the  early  days  of  her 
independence  occurred  in  1891,  when  President  Bal- 
maceda  dissolved  Congress  and  proclaimed  himself 
dictator.  Congress  deposed  him  and  organized  an 
army,  defeating  Bahnaceda,  who  committed  suicide. 
Both  parties  were  so  fearful  that  an  interest  payment 
on  the  national  debt  coming  due  in  London  during  the 
conflict  might  be  overlooked  by  the  other  that  each  of 
them  made  separate  remittances  to  London. 

It  has  been  assumed  that  South  Americans  would 
not  practice  thrift,  much  less  invest  money  in  their  own 
enterprises.  But  an  American  branch  bank  in  Buenos 
Aires  has  demonstrated  that  the  thrift  appeal  is  as 
potent  there  as  in  the  United  States.  A  savings  cam- 
paign conducted  on  American  lines,  with  advertising, 
home  savings  banks,  facilities  for  depositing  money 
where  people  are  employed  on  pay  day,  the  opening 
of  small  accounts  by  employees,  and  similar  methods, 
not  only  enabled  this  bank  to  secure  thousands  of  sav- 
ings accounts  in  a  short  time,  but  led  the  Argentine 
government  to  adopt  American  methods  in  its  own  sav- 
ings institution. 

The  American  dollar  can  be  exported  to  South 
America  in  two  forms — the  bond  buyer's  dollar  sent 
to  work  alone,  and  the  dollar  of  the  Yankee  who  goes 


TOOLS  OF  TKADE— IXVESTME:N'TS      85 

along  to  work  with  it,  in  ranching,  mining,  manufac- 
turing or  other  enterprises. 

The  hond  buyer's  dollar  must  have  safety  and  good 
management.  Gold  brick  schemes  follow  popular  in- 
terest closely,  thereby  enjoying  free  advertising.  Much 
has  been  printed  about  South  America  lately  in  the 
United  States.  Thousands  of  Americans  view  it  ro- 
mantically, as  a  region  where  nuggets  and  diamonds 
can  be  picked  up  in  the  street.  Great  stuff  for  the 
get-rick-quick  specialist ! 

Investment  bankers  complain  that  the  American 
bond  buyer  does  not  yet  know  South  America,  and  that 
creating  a  market  for  its  bonds  is  a  matter  of  time  and 
education.  The  gold  brick  promoter's  demand  has 
already  been  developed.  Remoteness  and  ignorance 
are,  to  him,  not  handicaps,  but  selling  factors.  If  he 
gets  in  his  work  first,  it  will  be  bad  for  legitimate 
securities,  and  bad  for  South  America.  So  every  effort 
should  be  made  by  investment  banking  interests  to  safe- 
guard the  American  dollar  that  is  sent  south  to  work 
alone. 

The  experienced  Amencan_investor,  on  the  contrary, 
is  often  unwilling  to  buy  sound  South  American  securi- 
ties because  he  knows  nothing  about  the  countries, 
municipalities  or  corporations  that  issue  them.  Again 
and  again  our  bond  bankers  have  investigated  the 
financial  needs  of  a  South  American  republic  or  city, 
found  the  security  good,  but  refused  to  take  an  issue 
of  bonds  because  the  American  investor  had  never  heard 
of  the  locality.  Selling  the  bonds  would,  therefore, 
involve  an  education  in  South  American  geography. 


86         BUSmESS  m  SOUTH  AlVIEEICA 

An  issue  of  school  "bonds  by  some  rural  county  in  the 
United  States  could  be  sold  with  one-tenth  the  effort 
required  for  bonds  of  a  city  like  Pernambuco  in  Brazil. 

Well-sifted  South  American  bond  issues  should  be 
so  much  like  our  own  that  investors  could  purchase 
them  simply  because  offered  by  a  responsible  bond 
house.  To  do  more  business  in  South  America  we  must 
lend  more  money  for  the  development  of  the  countries. 
To  lend  more,  we  must  learn  more  about  them,  es- 
pecially their  local  problems  and  projects.  Local 
development  in  the  United  States  has  been  largely 
carried  out  by  teamwork  between  bond  bankers  and 
communities.  South  America  is  not  different  in  any 
essential  respect.  We  have  the  money  and  the  invest- 
ment machinery.  We  must  "bone  up"  on  the  geog- 
raphy. 

Some  of  the  busiest  and  safest  American  dollars 
working  on  the  Southern  continent  are  those  invested 
in  meat  packing,  mining,  the  distribution  of  petroleum 
products  and  similar  enterprises  of  strong  American 
corporations.  Much  of  this  capital  is  secured  by  bonds 
of  the  American  corporations,  and  the  investor  not  only 
buys  such  bonds  confidently,  but  the  question  of 
"educating"  him  in  South  American  values  doesn't 
arise  at  all,  because  he  may  not  know  that  his  dollar 
has  a  job  in  Buenos  Aires  instead  of  Chicago.  Amer- 
ican mercantile  houses  also  have  extensive  investments, 
with  branches  for  distribution  of  American  products  in 
the  West  Coast  countries.  But  our  investments  in  South 
America  proper  do  not  yet  compare  in  magnitude  or 
diversity  with  those  in  Central  America  and  the  West 


TOOLS  OF  TRADE— IXVESTMEXTS      87 

Indies,  where  American  capital  is  engaged  in  sugar, 
mining,  fruit,  general  agi-iculture  and  a  wide  range  of 
commercial  enterprises.  The  direct  business  value  of 
such  investments  is  gi-aphically  shown  in  percentage 
of  export  and  import  trade  done  with  those  countries- 
it  exceeds  fifty  per  cent,  and  in  some  cases  approaches 
seventy-five  per  cent,  whereas  a  rough  average  for  South 
American  countries  would  be  from  twenty-five  to  thirty- 
five  per  cent. 

Our  strongest  present  investment  tendency  in  South 
America  is  along  this  line.  For  example,  one  of  the 
big  locomotive  concerns  has  settled  an  executive  in  Rio 
de  Janeiro,  with  instructions  to  grow  up  with  Brazil's 
transportation  development.  Whatever  form  this  com- 
pany's participation  takes,  whether  planting,  building 
or  operating  railroads,  establishing  plants  for  assem- 
bling or  making  railroad  equipment,  capital  may  be 
secured  upon  its  own  bonds  or  stock  issues.  Even  if 
Brazilian  securities  be  issued,  they  will  be  backed  by 
the  judgment  and  credit  of  American  business  men. 

For  the  dollar  that  works  under  the  supervision  of 
its  owner  there  are  plenty  of  opportunities  on  the 
Southern  continent.  When  war  cut  off  supplies  of 
manufactured  goods.  South  America  began  to  establish 
industries  of  its  own.  To-day  in  most  of  the  countries 
there  is  a  boom  in  "productos  nacional,"  or  things  made 
at  home.  These  comprise  local  industries,  such  as 
beverages,  baking,  printing,  furniture,  tobacco,  repair 
shops  and  the  like,  also  working  up  raw  materials  of 
the  country  into  fabrics,  clothing,  leather,  shoes  and  so 
forth.     South  American  prices  for  these  things  come 


88         BUSINESS  m  SOUTH  AMEEICA 

pretty  near  being  the  highest  in  the  world,  and  sub- 
stantial tariff  protection  is  given  new  industries. 
British  capital  is  being  liberally  invested  in  South 
American  textile  mills,  shoe  factories,  and  other  enter- 
prises. This  is  a  field  where  experience  is  needed,  as 
well  as  ample  capital.  ISTobody  should  be  encouraged 
to  set  up  a  factory  in  South  America  on  a  shoestring. 
And  yet,  such  is  the  futility  of  advice  that  probably 
many  a  Yankee  during  the  next  ten  years  will  succeed 
on  a  shoestring,  investing  his  experience  in  making 
characteristic  Yankee  things  like  good  ready-made 
clothing,  for  which  there  is  unquestionably  an  attractive 
field. 

There  are  opportunities  in  farming,  if  one  has  capi- 
tal. Some  of  the  countries,  such  as  Argentina  or 
Uruguay,  have  passed  out  of  the  pioneering  period  and 
reached  fairly  high  land  values,  balanced  by  the  advan- 
tage of  packing  plants  that  afford  a  market  for  their 
cattle,  hogs  and  sheep.  But  other  countries,  like  Brazil 
and  Paraguay,  are  still  where  Texas  was  a  generation 
ago,  and  offer  opportunities  to  the  rancher  who  knows 
his  business.  In  tropical  regions  there  are  opportuni- 
ties for  fruit-growing,  fibers,  cacao,  coffee  and  rubber, 
as  well  as  getting  such  products  to  market.  Mining, 
lumbering  and  transportation  are  still  other  fields.  For 
the  most  part,  they  require  large  capital  and  corpora- 
tion methods,  yet  one-man  construction  and  operation 
of  a  railroad  is  not  unknown  in  the  back  regions  of  a 
transportation-hungiy  country  like  Brazil. 

Whether  such  opportunities  are  more  abundant  or 
attractive  in  South  America  than  at  home,  all  depends. 


TOOLS  OF  TEADE— IXYESTMEXTS      89 

The  Soutliern  continent  is  not  as  crowded  as  our  own 
— but  neither  does  it  possess  the  consuming  demand  of 
115,000,000  people,  nor  is  the  individual  living  stand- 
ard so  high.  Excepting  the  Canadian  boundary  and 
transportation  costs,  Korth  America  is  all  of  a  piece, 
whereas  South  America  comprises  ten  separate  coun- 
tries. Very  little  trade  is  done  between  them.  Disr 
tances  are  immense,  and  transportation  lacking.  Each 
province  or  state  is  often  a  little  country  to  itself,  col- 
lecting local  taxes  on  industries  and  products.  These 
taxes  are  often  increased  as  the  industries  thrive,  and 
may  even  kill  them. 

An  amusinc:  storv  told  in  Brazil  was  that  of  a  farmer 
who,  responding  to  hungry  demands  for  Irish  potatoes, 
planted  a  large  acreage.  The  potatoes  thrived  beauti- 
fully, against  popular  superstition  that  they  wouldn't 
grow  in  that  region.  But  the  local  authorities  promptly 
assessed  such  a  tax  on  potatoes  that  the  farmer  was 
unable  to  dis:  them. 

South  America  is  a  wonderland  of  undeveloped 
riches!  But  it  is  not  a  land  of  easy  money  either  for 
the  immigrant  or  the  investor.  Both  the  optimist  and 
the  pessimist  can  find  facts  about  it  to  demonstrate 
their  conflicting  views.  The  safe  and  sensible  view  lies 
between,  in  the  middle  of  the  road. 


CHAPTEK  VII 

THE  TOOLS  OF  THE  TRADE— DISTRIBUTION 

ISTotliing  in  Soutli  America  seems  to  puzzle  American 
manufacturers  quite  as  mucli  as  the  dealer — the  retail 
merchant  with  the  shelves,  show  windows  and  service, 
through  whom  they  distribute  their  goods  at  home. 

There  is  an  ample  technical  literature  describing  the 
South  American  merchant,  but  it  bristles  with  strange 
terms — direct  representatives,  importing  agents,  mer- 
chant agents,  wholesale  importers,  retail  importers, 
coast  houses,  up-country  houses. 

These  are  really  the  dealer  as  we  know  him  at  home, 
but  in  different  guises,  according  to  the  size,  population 
and  purchasing  power  of  his  territory.  You  can  do 
business  with  him  when  you  know  him,  and  probably 
utilize  a  good  deal  of  your  dealer  experience  at  home, 
for  his  benefit  and  your  own. 

In  Buenos  Aires  and  Eio  de  Janeiro  there  are  im- 
porters who  sell  to  jobbers  only,  importers  who 
wholesale  to  retailers,  department  stores  that  import 
direct,  and  a  consumer  turnover  large  enough  to  war- 
rant direct  representation  through  one's  own  branches 
in  many  lines. 

Cross  the  river  to  Uruguay,  however,  or  over  the 
Andes  to  Bolivia  and  Peru,  and  turnover  shrinks  down 

90 


TOOLS  OF  TKADE— DISTEIBUTION      91 

BO  that  importer,  wholesaler  and  retailer  are  all  jumbled 
together,  and  direct  representation  through  your  own 
branches  is  unprofitable  unless  there  is  special  demand 
for  things  like  pneumatic  drills  up  in  the  mines.  Fol- 
low the  coast  up  into  Central  America  and  the  importer 
is  a  wholesaler,  retailer,  banker,  money  lender,  produce 
buyer,  shipo^vner  or  anything  else  that  may  be  neces- 
sary to  get  business  done. 

It  is  the  cities,  and  the  two  largest  republics  of 
Argentina  and  Brazil,  with  sixty  per  cent  of  South 
Americans  population,  that  appeal  chiefly  to  our  busi- 
ness imagination.  So  long  as  we  can  distribute  on 
lines  reasonably  like  those  familiar  in  our  Eastern 
states,  we  understand  the  game.  But  the  real  South 
American  outlet  is  a  country  general  store,  selling 
plows  and  penknives,  cotton  duck  and  dynamite,  and 
taking  pa^Tuent  in  wool,  goat  skins,  coffee,  rubber  and 
vegetable  ivory. 

The  American  visiting  the  Southern  continent  for 
the  first  time,  and  calling  upon  his  representatives,  is 
usually  astonished  by  the  diversified  character  of  the 
goods  they  handle,  and  the  many  kinds  of  business 
that  they  transact.  They  are  importers,  exclusive 
agents,  wholesalers  and  perhaps  retailers.  Automatic 
scales  and  safety  razors,  tooth-powder  and  bacon,  plows 
and  steamship  tickets,  are  sold  wholesale  or  retail,  and 
your  agent's  premises  resemble  an  auction  room  or  a 
junk  shop.  Back  in  the  country  his  traveling  salesmen 
are  working,  with  samples  of  everything  under  the  sun. 
If  they  cannot  sell  the  country  merchant  an  automatic 
scale,  perhaps  he  will  buy  a  fountain  pen,  or  stock  a 


92         BUSmESS  m  SOUTH  AMEETCA 

dozen  cheap  watclies.  Tlie  ■up-country  retailer  carries 
just  as  motley  a  stock,  buys  produce,  lends  money,  ex- 
tends long  credits  to  his  customers,  and  tides  them  over 
harvest  seasons  and  crop  failures.  Except  in  a  half 
dozen  large  centers  the  country  general  store  is  the 
principal  distributing  outlet  of  South  America,  and 
the  Briton,  the  German  and  others  who  have  lived  long 
with  the  trade  on  the  Southern  continent  understand 
this,  and  do  business  in  the  flexible  way  imposed  by 
the  conditions. 

Even  in  Brazil  and  Argentina  the  general  store  ob- 
tains outside  the  cities.  Rio  de  Janeiro  has  its  depart- 
ment stores  and  specialty  shops  for  French  govnis  and 
bonnets.  Direct  steamers  from  Europe  to  Para,  Bahia, 
Pernambuco  and  Santos  (the  port  for  Sao  Paulo)  give 
those  centers  import  houses,  which  are  visited  by  travel- 
ing salesmen  from  the  industrial  countries.  But  in 
Southern  Brazil,  where  ports  are  visited  only  by 
coastwise  steamers,  and  the  turnover  in  imported  goods 
will  not  bear  the  expense  of  traveling  salesmen  from 
Europe  or  the  United  States,  or  afford  commissions 
large  enough  for  exclusive  importing,  business  has  to 
be  done  on  the  general  store  basis. 

South  America  is  like  our  Western  states  contrasted 
with  the  thickly  populated  East.  As  at  home,  one 
begins  by  selling  to  retailers  direct  through  one's  own 
branches,  and  a  little  farther  west  to  large  wholesale 
concerns,  and  still  farther  on  to  local  jobbers,  and 
finally  to  retailers  who  job  to  small  merchants  back  in 
the  country.    The  goods  get  farther  and  farther  away, 


TOOLS  OF  TEADE— DISTRIBUTION      93 

the   individual   order   smaller,   contact   more   difficult, 
turnover  less  frequent,  and  terms  more  flexible. 

The  aggi-egate  of  all  this  scattered  business  is  worth 
while  at  home.  Our  manufacturers  push  goods  as  far 
as  they  can  by  saleswork,  and  then  pull  at  the  other 
end  through  consumer  advertising.  They  may  not  be 
able  to  visit  the  distant  retailer,  but  they  send  him 
selling  helps.  Through  sales  of  car  lots,  in  many  cases, 
they  are  able  to  increase  the  turnover  of  the  small 
jobber  on  what  might  be  called  their  sales  frontier,  and 
to  help  the  capable  retailer  beyond  the  frontier  perform 
jobbing  sen'ice. 

We  do  this  at  home  because  we  know  all  the 
machinerv,  and  the  fellows  who  run  it,  though  they 
may  be  two  thousand  miles  away,  and  we  have  never 
seen  them.  We  speak  the  same  language,  linguistically 
and  in  business  methods.  We  can  do  it  in  South 
America  when  we  know  the  machinery  and  the  men. 
There  is  a  difference  in  language,  and  also  in  thinking 
to  some  extent,  but  these  are  interesting  variations — 
not  obstacles. 

The  best  way  of  getting  acquainted,  of  course,  is  by 
a  personal  visit  to  South  xlmerica,  beginning  with  the 
cities  and  following  trade  ramifications  right  out  into 
the  pampas  and  the  mountains.  This  calls  for  an  in- 
vestment in  money  and  time.  One  should  know 
Spanish,  if  not  Portuguese,  and  expect  to  rough  it  occa- 
sionally. 

A  Yankee  export  manager  was  sent  on  such  a  trip 
by  his  house.  Late  one  night,  after  a  week  on  horse- 
back, he  reached  a  little  village  in  the  interior  of 


94        BUSmESS  IlSr  SOUTH  AMERICA 

Brazil.  They  showed  him  into  a  room  with  three  beds. 
Dropping  asleep  on  the  first,  he  was  wakened  by  bugs. 
The  next  bed  looked  cleaner,  but  fleas  drove  him  out  of 
that.  He  retreated  to  the  third,  where  the  ants  dis- 
covered him  before  morning.  But  he  learned  some- 
thing about  Brazil — that  the  Brazilians  make  the  best 
hammocks  in  the  world,  and  a  hammock  is  the  thing 
^f or  such  trips.  Because  he  went  into  the  back  country 
and  learned  how  goods  are  distributed  to  the  last  con- 
sumer, his  house  now  has  branches,  and  a  volume  of 
business  that  may  ultimately  warrant  its  own  steam- 
ships. 

It  is  possible  to  learn  much  about  the  South 
American  dealer  at  secondhand,  and  by  an  odd  kink 
in  the  distributing  machinery,  the  greater  the  distance 
he  is  located  back  in  sparsely  settled  countries,  the  more 
directly  he  is  linked  with  distributing  machinery  in  the 
United  States. 

Central  America  and  the  West  Coast  countries  are 
commercially  the  most  remote.  Their  purchases  are 
smaller,  fewer  Americans  are  found  in  them,  their 
people  live  in  inaccessible  mountain  regions,  and  hardly 
any  line  of  products  warrants  branch  representation  or 
even  regular  visits  by  salesmen.  But  these  countries 
enjoy  better  steamship,  mail  and  cable  service  with  the 
United  States  than  the  East  Coast,  and  service  through 
large  American  concerns  that  sell  them  our  products 
and  find  markets  for  their  own.  These  concerns  have 
large  organizations  in  the  United  States,  and  their 
business  is  departmentalized,  so  that  anybody  seeking 
information     about    better     distribution    of     adding 


TOOLS  OF  TEADE— DISTEIBUTION      95 

macliines,  cotton  hosiery,  shotguns,  or  tomato  catsup  in 
those  countries  could  find  a  competent  adviser  in  Ne^ 
York  or  San  Francisco. 

Our  banks  in  South  America  are  excellent  sources 
of  infonnation.  Primarily,  they  supply  credit  data, 
make  collections,  advise  about  documents,  terms,  tariff 
regulations  and  other  details  connected  with  actual 
shipments.  But  there  are  men  of  imagination  in  their 
organizations,  both  in  Latin  America  and  at  home. 
These  men  are  ready  to  make  suggestions  toward  bet- 
tering dealer  distribution  in  any  line.  Better  dealer 
distribution  means  more  business  for  the  bank.  If  they 
do  not  know  how  to  advise  in  a  specific  line  or  locality, 
they  will  go  out  and  investigate.  The  big  idea  is,  that 
somebody  really  wants  to  get  closer  to  the  Latin  Ameri- 
can dealer. 

!N'ext  come  organizations  of  American  business  men 
on  the  Southern  continent,  such  as  the  Chamber  of 
Commerce  of  the  United  States  in  Buenos  Aires  (Calle 
Bartolome  Mitre  455),  the  American  Chamber  of  Com- 
merce for  Brazil  in  Eio  de  Janeiro  (Avenida  Eio 
Branco  110),  the  IN'orth  American  Chamber  of  Com- 
merce in  Valparaiso  (Calle  Prat  271),  and  the  Eotary 
Club  of  Uiniguay  (Herbert  P.  Coats,  Calle  Sarandi 
469).  Information  given  by  these  organizations  will  be 
secured  either  through  special  investigation  or  from 
members  engaged  in  the  particular  line  about  which  it 
is  sought. 

Special  information  is  also  obtainable  from  United 
States  consuls  and  the  commercial  attaches  at  our  em- 
bassies, now  kno^n  as  trade  commissioners  and  working 


96         BUSINESS  IN  SOUTH  MIEEICA 

under  the  Bureau  of  Foreign  and  Domestic  Commerce. 

The  idea  of  helping  him  move  goods  after  you  have 
sold  them  to  him  and  got  the  money  is  decidedly  new 
to  the  South  American  dealer,  even  where  he  has  a 
fine  city  establishment.  The  manufacturer  is  far  off, 
in  Europe  or  the  United  States,  so  that  distance  has 
made  teamwork  difficult. 

An  American  optical  concern  sent  a  representative  to 
Buenos  Aires,  not  to  sell  goods,  but  to  create  interest 
in  dealers  by  demonstration.  The  first  dealer  upon 
whom  this  representative  called  complained  that  the 
American  products  were  not  as  good  as  the  German, 
formerly  dominating  that  market. 

"What  makes  you  say  that  ?"  asked  the  American. 

*'My  own  experience,"  was  the  reply.  "I  have  two 
cameras,  one  German  and  the  other  your  make.  The 
German  camera  always  gives  better  results.'' 

"Will  you  let  me  test  them  both  ?"  asked  the  Ameri- 
can. And  by  making  pictures  with  each  camera,  and 
submitting  them  unmarked  for  the  Argentine's  opin- 
ion, he  himself  pronounced  the  work  of  the  American 
camera  superior.  Having  sold  to  the  man  behind  the 
counter,  this  representative  called  upon  photogi-aphers, 
oculists,  users  of  microscopes  and  other  apparatus,  giv- 
ing technical  information  and  creating  demand  for 
dealers. 

Because  the  idea  is  new,  and  also  because  many 
dealers  in  South  America  are  country  merchants, 
dealer  aid  cannot  be  as  direct  or  elaborate  as  in  the 
United  States.  Propose  a  "Paint  Up"  week  to  the 
shopkeepers  of  Chile,  and  they  would  neither  know 


TOOLS  OF  TRADE— DISTRIBUTION      97 

what  you  were  talking  about,  nor  have  the  organization 
to  carry  it  out.  But  it  is  entirely  feasible  to  help  them 
increase  paint  sales  by  methods  that  work  automati- 
cally. 

For  example,  window  and  counter  display  devices 
are  a  novelty  in  South  America.  The  Germans  alone 
made  efforts  along  this  line,  and  displaced  unattrac- 
tively packed  British  goods,  putting  their  scissors  on 
counter  cards  where  the  British  article,  wrapped  in 
paper,  was  kept  out  of  sight  in  a  drawer.  We  lead  in 
such  devices,  and  if  our  goods  reach  the  South  Ameri- 
can dealer  in  novel  display  containers,  and  he  finds 
them  selling  themselves,  he  will  see  the  point. 

An  American  woman  took  charge  of  a  sal-soda  fac- 
tory in  Rio  de  Janeiro.  There  were  1,200  retail 
gi-ocers  in  the  city,  sei-ved  by  a  few  wholesale  houses 
that  would  have  overloaded  the  retailers.  A  trade-mark 
was  adopted  for  the  product,  and  she  began  to  call  upon 
the  gi'ocers  herself.  Sal-soda  is  a  laundry  essential  in 
Brazil,  washing  soap  being  very  expensive,  and  caustic 
soda,  the  universal  substitute,  destructive  to  clothes. 
Samples  were  given  dealers,  and  a  very  small  bag  of 
the  chemical  placed  for  sale — a  ten-pound  bag,  sixty- 
three  cents  wholesale,  to  be  sold  in  bulk  by  the  nickel's 
worth.  Very  often  a  second  call  showed  that  the  little 
grocer  was  selling  the  samples.  The  average  grocer's 
shop  in  Rio  de  Janeiro  is  a  pretty  small  affair,  with  its 
fifty-dollar  stock  of  dried  meat,  salt  fish,  rice,  beans  and 
similar  bulk  staples.  But  specialties  have  been  intro- 
duced by  sampling  and  personal  work,  and  advertising 


98         BUSIiraSS  IN  SOUTH  AMEEICA 

has  an  effect  upon  sales  when  distribution  is  secured 
first. 

Very  often  the  retail  merchant  has  no  show  window. 
In  the  cities  it  is  almost  the  universal  custom  to  draw 
iron  shutters  down  over  shop  windows  at  night,  and 
during  the  two-hour  noon  ^^breakfast,"  when  everybody 
closes  up  shop  and  goes  home.  So  window  dressing 
material  will  not  be  as  useful  to  him  as  signs,  trans- 
parencies, pictures,  placards,  posters  and  cut-outs. 
Pictures  of  handsome  women,  and  particularly  our 
show  girls,  always  attract  attention.  The  movie  fans 
of  South  America,  women  as  well  as  men,  decorate 
their  rooms  with  portraits  of  film  stars.  Pictures  of 
the  big  and  characteristic  industrial  things  in  the 
United  States  are  also  interesting  in  countries  where 
industry  is  not  so  well  developed — ^big  buildings,  work- 
forces, machinery,  and  the  like. 

Go  into  the  American  farmer's  home,  and  you  will 
find  tropical  pictures,  usually — palms,  cocoanuts  and 
bananas.  And  in  the  hut  of  the  Brazilian  rubber 
gatherer  you  are  pretty  certain  to  find  ice  and  snow 
pictures  of  some  sort.  This  illustrates  the  universal 
human  interest  in  what  is  remote  and  different,  and 
gives  a  suggestion  for  planning  dealer  aids. 

Containers  offer  sales  possibilities.  There  have  been 
cases  where  American  manufacturers,  proud  of  a  sud- 
den demand  for  their  goods  in  South  America,  disr 
covered  that  demand  was  reallv  for  the  containers. 
Glass,  china,  fiber,  metals  and  even  wood  are  so  scarce 
along  the  West  Coast  that  people  come  out  in  boats 
when  a  ship  arrives  and  eagerly  gather  every  bottle, 


TOOLS  OF  TRADE— DISTRIBUTION      99 

crate  and  can  thrown  overboard.  ''Yes,  senor/'  said  a 
West  Coast  druggist  when  asked  for  a  certain  chemical, 
''but  you  must  supply  the  bottle."  Many  of  the  double 
purpose  containers  which  we«have  evolved  could  doubt- 
less be  adapted  to  South  America  to  stimulate  sale. 

Samples  are  appreciated  by  the  dealer.  Advertising 
novelties  and  trinkets  also  come  in  handy.  The  pre- 
mium idea,  by  which  coupons  or  labels  are  redeemed, 
has  apparently  never  been  widely  applied  on  the 
Southern  continent. 

Dealer  aid  will  be  a  good  thing  for  both  the  Latin 
American  merchant  and  the  American  manufacturers. 

To  the  merchant,  it  is  the  beginning  of  .a  better  way 
of  doing  business.  His  turnover  is  slow,  and  often 
small.  His  profit  margin  must  be  correspondingly 
large.  Money  costs  him  high  interest  rates,  and  he 
needs  a  gi-eat  deal  of  it,  because  his  goods  travel  long 
distances,  and  his  customers  require  long  credit.  Dead 
stock  clutters  his  shelves,  and  he  will  keep  it  to  the  end 
of  time,  hoping  to  get  his  money  back  with  the  regular 
profit  rather  than  clear  it  off  on  the  bargain  counter, 
of  which  he  may  never  have  heard.  It  will  be  a  good 
thing  for  him,  and  for  the  public  in  those  countries  of 
excessive  prices,  when  quick  turnover  makes  his  money 
really  work,  and  lowers  prices  and  profit  margins. 

For  the  American  manufacturer,  dealer  aid  will 
bridge  the  gap  of  distance  and  indifference  that  now 
makes  so  much  of  our  South  American  business  hap- 
hazard, irregular  and  irritating.  Goods  will  be  sup- 
plied regularly,  in  many  cases  through  reserve  stocks 
in  the  Southern  countries,  volume  being  built  up  so 


100     BusmEss  m  south  ameeica 

that  this  becomes  practicable.  The  South  American 
merchant's  aversion  to  trade-marked  goods  will  be 
broken  down  when  he  understands  that  trade-mark  is 
another  term  for  turnover.  There  will  be  less  shoddy 
and  substitution,  at  present  the  cause  of  irritation  in 
his  dealings  with  us,  because  unscrupulous  middlemen 
will  be  eliminated,  both  in  the  United  States  and  in 
South  America. 

Briefly,  dealer  aid  is  simply  getting  on  to  the  South 
American  merchant's  side  of  the  trade,  looking  at 
things  through  his  eyes,  and  helping  him  with  a  knowl- 
edge of  his  conditions,  difficulties,  ability  and  tem- 
perament. It  has  worked  in  America  del  Norte.  It 
will  work  in  America  of  the  South — if  we  work  it. 

Interest  in  and  support  of  American  chambers  of 
commerce  abroad  is  strongly  urged  upon  American  busi- 
ness houses.  These  organizations  become  necessary  as 
soon  as  our  trade  with  a  given  country  assumes  re- 
spectable volume.  They  undertake  adjustments  where 
misunderstandings  and  disputes  arise  concerning  ship^ 
ments  of  goods,  work  for  better  shipping  service  and 
business  regulations,  make  investigations  and  reports, 
and  conduct  other  activities,  the  cost  of  which  is  heavy, 
measured  by  their  membership  of  perhaps  a  few  dozen 
Americans  on  the  spot.  Through  associate  membership, 
costing  from  $50  to  $100  yearly,  business  concerns  in 
the  United  States  can  assist  them  financially,  and  such 
associate  membership  almost  invariably  brings  excellent 
value  in  reports,  bulletins  and  special  service  available 
to  members  requiring  information  about  the  countries 
where  they  are  established. 


CHAPTER  VIII 

THE  TOOLS  OF  THE  TRADE— AMERICAN  RETAILING 

Inside  and  indoors,  the  Soutli  American  is  French — 
as  a  matter  of  education,  reading,  culture  and  ideals. 

Outside  and  outdoors,  he  is  English,  drinking  his 
five  o'clock  tea,  wearing  drab  London  clothes  and  ties, 
going  in  for  soccer  football,  tennis,  rowing — and  lately 
even  golf  and  the  ^^match  de  box.'' 

Which  is  curious,  when  one  remembers  that  his  real 
motherland  is  either  Spain  or  Portugal.  The  trade  of 
these  latter  countries  in  South  America  is  negligible, 
however,  and  their  influence  through  literature  or  edu- 
cation nothing  at  all.  There  is  a  sentiment  so  strong 
the  other  way  that  it  amounts  to  prejudice.  Spanish 
influence  in  sports  is  illustrated  by  one  bull-fighting 
arena  in  all  South  America,  with  a  few  professional 
games  of  the  Basque  pelota,  a  form  of  handball  that 
serves  small  gamblers  like  our  '^bucket  shops." 

French  and  British  influence  are  partly  psycho- 
logical. 

The  Spanish  American  and  Brazilian  both  need  a 
second  language  to  acquire  an  education,  as  the  world's 
literature  and  science  are  published  chiefly  in  English, 
French  and  German,  and  cannot  profitably  be  trans- 

101 


<    < 


102  .  ^  ^BUSmES'S  JN  SOUTH  AMEKICA 

lated  into  Portuguese  or  Spanish.  Frencli  has  been 
the  other  language  of  the  South  American. 

British  influence  began  when  English,  Scotch  and 
Irish  adventurers  helped  the  Spanish  American  coun- 
tries fight  for  independence,  and  was  followed  up  by 
British  commercial  colonies  and  intermarriage.  In 
commercial  matters  the  South  American  has  always 
turned  to  the  Britisher. 

But  there  is  another  influence  which  we  have  over- 
looked in  our  export  studies  of  South  America^ — that 
of  the  retailer. 

La  Senora  buys  her  gowns,  hats  and  lingerie  at 
French  shops  in  Buenos  Aires — not  the  "near-Erench" 
shops  of  New  York,  but  large  branches  of  famous 
Parisian  establishments.  South  American  homes  are 
furnished  largely  with  French  furniture,  carpets, 
draperies  and  works  of  art,  sometimes  bought  during 
visits  to  Paris,  but  more  likely  in  shops  set  up  by 
French  merchants  in  South  American  capitals. 

British  department  stores  are  also  found  in  these 
capitals,  stocked  almost  entirely  with  British  goods  in 
normal  times,  and  so  thoroughly  British  in  their 
methods  and  atmosphere  that  they  might  have  been 
lifted  bodily  from  Oxford  Street,  save  for  the  Latin 
employees.  The  English  bookstore  is  likewise  a  South 
American  institution,  selling  much  more  than  books — 
a  novelty  shop  carrying  stationery,  games,  toys  and 
notions. 

For  us,  there  is  a  vital  point  in  this  influence  of  the 
retailer. 

South  America  is  turning  now  to  Yankee  things. 


TOOLS  OF  TRADE— RETAILING       103 

War  brought  our  products  to  its  doors,  and  gave  us  a 
better  reputation  nationally.  It  was  learned  that  we 
were  not  too  soft  to  figlit,  nor  too  money-loving  to  fight 
on  the  right  side.  The  South  American  began  to  visit 
the  United  States,  liked  it,  let  himself  go  a  little  in 
cravats  and  socks,  learned  English  for  another  ^'other 
language,' '  arranged  to  send  one  or  two  of  his  boys  to 
college  in  the  United  States,  making  them  engineers 
instead  of  doctors  of  law.  This  is  not  a  passing  fashion, 
nor  a  matter  of  sentiment.  As  France  and  England 
have  given  him  definite  values,  so  he  sees  value  in  what 
we  have  to  offer — the  genius  of  the  practical  and  a 
knack  at  handling  big  things  which  are  now  needed  in 
the  material  development  of  his  country. 

British  and  French  retail  enterprises  were  started 
in  South  America  in  days  after  the  rich  Argentino 
burst  upon  the  astonished  shopkeepers  of  London  and 
Paris.  Those  were  days  of  sudden  wealth  made  in 
pampa  lands  considered  worthless  by  the  previous  gen- 
eration. One  generation  bought  the  land  for  a  dollar  1 
an  acre  after  President  Roca's  government  had  exter-  ^ 
minated  the  savage  Indians,  in  the  early  eighties.  The 
next  generation  found  millions  pouring  in  as  profits  on  { 
tenant  farming.  Sometimes  the  same  generation  made 
and  spent  the  money,  as  in  Blasco  Ibanez'  Four 
Horsemen  of  the  Apocalypse.  The  spending  Argen- 
tino demanded  something  better  than  the  very  best  in 
every  line  of  merchandise.  He  paid  for  it  with  a 
prodigality  that  made  the  Yankee  millionaire  compara- 
tively uninteresting  as  a  spendthrift.  John  Bull  and 
Mile.  Jeanne  lost  no  time  in  setting  up  shop  where  such 


104       BUSINESS  m  SOUTH  AMFRICA 

wonderful  customers  lived — they  headed  straight  for 
Buenos  Aires. 

Of  course,  times  have  changed  since  then.  Argen- 
tina's prosperity  has  waned,  and  then  returned,  waned 
and  returned  again.  Based  on  meat  and  grain  alone, 
it  is  subject  to  speculative  fluctuations.  But  with  his  re- 
cent ups  and  downs,  the  Argentino  has  gained  balance. 
No  longer  the  parvenu  of  the  pampas,  he  buys  with 
discrimination,  and  still  has  a  per  capita  expenditure 
exceeding  that  of  other  world  capitals.  His  present 
prosperity  is  probably  good  for  ten  years,  because 
Europe  is  desperately  short  of  his  products. 

European  retail  establishments  have  been  extended 
to  other  South  American  cities.  Buenos  Aires,  Eio  de 
Janeiro,  Sao  Paulo,  Santos,  Montevideo,  Santiago  and 
Valparaiso  are  the  chief  centers,  and  each  has  one  or 
more  British  department  stores,  branches  of  concerns 
like  Harrods,  Gath  &  Chaves,  Mappin  &  Webb.  These 
retail  enterprises  pay  handsome  profits  in  themselves. 
More  important,  they  afford  ample,  continuous  outlets 
for  British  and  French  goods,  particularly  the  products 
of  smaller  manufacturers  who  might  be  unable  to  ma^*- 
ket  their  wares  through  regular  export  channels. 

As  our  South  American  trade  grows,  and  the  de- 
mand of  that  continent  expands,  there  will  be  room 
in  the  chief  cities  for  American  retail  enterprises  too — 
department  stores,  five-and-ten-cent  stores,  chain  stores, 
and  the  like,  managed  in  our  characteristic  way. 
Competent  observers  say  that  there  is  room  already  for 
individual  American  retailers  in  such  lines  as  hard- 
ware,  carrying   complete   stocks   of   mechanics'   tools, 


TOOLS  OF  TRADE— KETAILING        105 

builders'  hardware  and  other  ingenious  Yankee  ''iron- 
mongery." An  American  who  dropped  into  Santiago, 
Chile,  and  began  retailing  hardware  in  the  way  that 
he  had  learned  to  retail  it  at  home  made  such  a  hit 
with  the  Chileans  that  an  entei'prising  German  con- 
cern bought  him  out — it  valued  that  sort  of  outlet.  Or 
so  the  story  goes. 

Energetic  retailing  is  needed  in  South  America  to 
cut  profit  margins,  increase  turnover,  and  give  the 
public  service.  And  it  is  needed  to  open  up  a  road 
to  market  for  thousands  of  American  manufacturers 
who  cannot  afford  individual  selling  effort  or  direct 
representation  on  the  Southern  continent. 

Seventy-five  per  cent  of  our  normal  exports  to  South 
America  are  the  products  of  large  corporations  with 
capital  to  finance  the  trade  and  maintain  outlets  of 
their  own  in  the  form  of  branch  houses — farm 
machinery,  sewing  machines,  electrical  appliances,  and 
the  like.  But  to  build  and  hold  trade  that  way  is 
almost  impossible  for  many  small  concerns. 

Take  the  needle  trades  of  ^ew  York  City  as  an 
example.  Their  endlessly  diversified  output  of  "ready- 
to-wear"  for  women,  children  and  men  has  been  built  on 
our  middle-class  demand.  A  generation  ago  our  middle 
class  wore  "hand-me-dowms"  or  home-made  clothes. 
That  is  what  the  small  but  emerging  middle  class  wears 
in  South  American  cities.  Between  the  French  gowns 
of  the  Delegado's  wife  and  the  calico  shift  of  the 
washerwoman  there  is  hardly  anything  to  be  pur- 
chased in  the  shops — no  serviceable,  decent-fitting  suits 
at  twenty-five  to  thirty  dollars,  no  smart  medium-price 


106       BUSINESS  m  SOUTH  AMEEICA 

shirt-waists,  tailored  skirts,  cloaks.  What  the  shops 
show  are  either  expensive  approximations  of  Erench 
styles  in  good  materials  at  high  prices,  or  shoddy  imi- 
tations of  the  imitations  at  prices  which  would  buy 
real  clothes  in  the  United  States. 

Set  Potash  &  Perlmutter  down  in  South  American 
cities,  and  the  shops  would  remind  them  of  the  days 
when  they  first  emigrated  to  America,  "since  long  be- 
fore the  Spanish  war."  They  would  discern  dozens  of 
opportunities  for  introducing  their  line,  and  those  of 
their  friends.  But  against  high  tariffs,  distance  and 
other  handicaps  they  would  stand  little  chance  of  open- 
ing up  real  outlets  by  their  own  unaided  effort.  There 
is  probably  no  needle  trade  concern  in  New  York  large 
enough  to  enter  South  America  in  the  same  way  as,  say, 
the  Singer  Sewing  Machine  Company.  Some  of  the 
needle  trade  associations  are  keenly  interested  in  the 
possibilities.  But  with  patient  introductory  work  to 
be  done  for  a  class  of  goods  with  which  those  markets 
are  still  unacquainted,  and  the  chief  retail  outlets  con- 
trolled by  British,  Erench,  Italian  and  Spanish 
merchants,  there  are  obvious  difficulties. 

What  would  a  genuine  American  department  store 
mean  in  this  situation? 

Up  through  New  England,  thousands  of  small  fac- 
tories make  tens  of  thousands  of  contrivances  that  save 
labor  and  time  in  the  day's  work,  add  comfort  to  the 
home,  make  life  easier  generally.  Similar  industrial 
centers  are  found  west  beyond  the  Mississippi,  each 
with  its  characteristic  products  of  comfort,  convenience, 
pleasure,  ingenuity.     Our  own  trade  channels  at  home 


TOOLS  OF  TRADE— RETAILOTG        107 

are  now  so  well  organized  that  the  small  manufacturer's 
products  slip  into  the  market  a  state  at  a  time,  and 
ultimately  reach  national  sales  and  a  basis  for  broad 
consumer  advertising.  To  establish  themselves  in  a 
single  South  American  city,  by  tlieir  own  unaided 
effort,  would  take  more  money,  time  and  study  of  un- 
familiar detail  than  are  needed  to  add  a  whole  new 
group  of  states  to  home  distribution.  Here  comes  in 
the  gi'eatest  competitor  we  have  in  world  markets — • 
our  overwhelming  consuming  demand  at  home. 

But  if  there  were  American  retail  outlets  in  South 
America,  and  active  buying  of  new  products  in  the 
United  States  to  keep  them  stocked  with  novelties,  the 
case  would  be  altogether  different. 

South  America  needs  its  Selfridge,  Woolworth  and 
Whalen.' 

Its  staid  British  department  stores  remind  one  of 
London  before  Mr.  Selfridge  invaded  it  from  Chicago. 
The  polite  floorman  in  his  formal  garb  greets  you  at 
the  door,  and  turns  you  over  to  an  assistant.  If  the 
assistant  does  not  make  a  sale,  he  turns  you  back  to 
the  floorman,  London  fashion,  so  you  may  not  escape. 
If  you  make  a  purchase,  the  assistant  accompanies  you 
to  the  wrapping  counter,  and  then  to  the  cash  desk, 
where  you  pay.  In  busy  hours  you  may  wait  ten 
minutes  at  each  place.  The  assistant  waits  with  you, 
losinsr  a  dozen  sales  meanwhile,  and  you  are  luckv  to 
make  two  separate  purchases  in  the  hour — but  the  safe- 
guards of  British  retailing  are  observed.  If  you  cannot 
speak  Spanish,  they  may  let  you  wander  around  at  will 


108       BUSUSTESS  IN  SOUTH  AMEKICA 

and  look  at  merchandise  for  the  mere  pleasure  of  the 
thing — a  crazy  foreigner. 

The  idea  of  a  store  as  a  permanent  exposition  of 
merchandise — heautiful  things  to  be  looked  at  even  by 
those  who  cannot  afford  to  buy — is  still  novel,  as  it 
was  in  London  when  first  introduced.  In  South 
America  it  shows  in  antiquated  window  dressing  and 
the  scarcity  of  counter  and  interior  displays.  Every 
concession  made  by  the  conservative  British  system  in 
Buenos  Aires,  such  as  the  tea  room  with  its  orchestra 
for  a  meeting  place  in  the  afternoon,  and  the  "Ameri- 
can soda  fountain,''  has  been  enthusiastically  patron- 
ized by  the  Argentines — and  for  a  reason. 

"All  dressed  up  everywhere,  poor  dears,  and  not  a 
darned  place  to  go!"  was  an  American  woman's  com- 
ment upon  reaching  the  last  of  the  big  South  American 
cities. 

"What?"  the  reader  may  exclaim.  "Do  you  mean 
to  tell  me  that  South  America  is  not  gay,  with  its 
opera,  races,  clubs,  boulevards — the  Latin  tempera- 
ment, the  Latin  culture?" 

And  the  answer  is,  that  even  Buenos  Aires,  largest 
of  all  the  capitals,  and  much  like  Paris  in  many  ways, 
lacks  meeting  places.  Our  hotel  life  is  practically  un- 
known. There  are  cabarets,  but  they  begin  at  midnight 
— and  ladies  do  not  go.  The  movies — yes,  but  still  in 
what  our  exhibitors  call  the  "store  stage,"  with  real 
movie  palaces  yet  to  come.  The  great  outdoor  sport 
in  Buenos  Aires  is  gathering  in  narrow  Florida,  the 
shopping  street,  to  see  the  senoritas  go  by.  In  a 
smaller  capital  like  Santiago  there  will  be  a  single 


TOOLS  OF  TRADE— KETAILmG       109 

corner  in  the  small  shopping  district  where  all  the  gay 
young  bloods  line  up  at  ten  minutes  to  twelve  and  in- 
spect  the  senoritas  until  noon  strikes,  when  everybody 
goes  home  to  lunch  or  ^'breakfast."  In  still  smaller 
places  there  is  only  the  plaza,  with  its  promenading, 
gossip-hungry  crowds  on  band  concert  nights. 

A  South  American  girl  is  kept  home  by  her  parents 
until  she  marries.  After  that  she  is  kept  home  by  her 
husband.  If  you  step  out  into  the  street  some  morning 
and  find  them  suddenly  filled  w^ith  bewitching  bru- 
nettes, do  not  be  astonished — these  are  the  senoritas 
and  senoras  of  the  first  families,  and  they  want  to  pin 
a  ribbon  on  you  for  a  peso.  It  is  the  field  day  for 
some  charity,  a  chance  to  get  out,  a  great  lark.  To- 
morrow they  will  all  have  disappeared. 

Be  it  remembered  that  the  South  American  home  is 
a  wonderful  institution,  where  family  life  centers  and 
expands  in  a  way  unknown  to  us,  with  our  flats  and 
suburbs.  The  wife  devotes  herseK  to  her  children. 
Large  families  are  still  the  rule,  and  there  are  innumer- 
able relatives. 

Yet  the  old  order  changeth.  Women  are  watching 
our  life  in  the  movies,  and  aspiring  to  greater  freedom. 
The  girls  are  watching  even  more  keenly  than  the 
women.  To-morrow  they  will  all  want  to  vote,  prob- 
ably— mayhap  even  before  male  suffrage  is  universal 
in  South  American  countries.  If  American  depart- 
ment stores  could  be  set  down  in  half  a  dozen  Southern 
capitals,  they  would  satisfy  a  very  definite  demand, 
capture  the  carriage  trade  in  a  body,  and  begin  turning 
the  baby  carriage  trade  into  what  aU  South  America 


110       BUSINESS  m  SOUTH  AMEKICA 

needs  and  longs  for — a  well-dressed,  well-housed,  com- 
fortable middle  class. 

The  growing  tide  of  Latin  American  visitors  in  'New 
York  has  led  some  of  our  great  shops  to  serve  them 
through  interpreters,  and  follow  that  with  shopping 
facilities,  so  the  customer  returning  to  his  or  her  own 
country  can  have  goods  chosen  by  some  one  who  under- 
stands personal  needs.  This  adaptation  of  the  shopping 
service  familiar  at  home,  maintained  for  the  conveni- 
ence of  people  out  of  town,  has  lately  been  carried 
further  by  one  I^ew  York  store  with  an  "extension 
shop"  in  Havana.  The  extension  shop  displays 
fashions,  clothes,  furniture  and  other  merchandise, 
taking  orders  to  be  filled  from  ISTew  York.  The  orig- 
inator announces  that,  if  successful,  it  will  be  made 
permanent  in  Havana,  and  carried  to  other  Latin 
American  capitals.  However,  all  these  ingenious  ser- 
vices are  but  a  substitute  for  regular  American  stores 
and  shops,  permanently  located  in  the  Southern  cen- 
ters, doing  business  on  regular  mercantile  lines. 

The  best  principles  of  American  retailing  are  wholly 
novel  in  South  America. 

For  instance,  the  principle  that  goods  exert  a  fasci- 
nation of  their  own,  and  that  they  can  be  sold  almost 
automatically  if  skillfully  displayed.  Proper  display 
with  us  means  exhibiting  a  single  article  so  that  people 
can  visualize  it  on  their  backs,  or  in  their  homes,  and 
also  showing  it  alone,  with  no  other  merchandise  to 
distract  attention.  The  South  American  window 
dresser's  idea  is  to  requisition  from  stock  all  the  gar- 
ments that  can  be  crowded  into  the  space  at  his  disposal, 


TOOLS  OF  TKADE— RETAILING        111 

marshaling  them  on  dummies,  shoulder  to  shoulder, 
with  price  tickets.  Sometimes  he  adds  cards  with 
such  comment  as  ^'Muy  honita/'  "Que  linda,"  ''Her- 
mosa,"  meaning  "Very  pretty!"  ''How  handsome!'' 
''Beautiful !"  But  probably  it  has  not  occurred  to  him 
to  have  the  wrinkles  ironed  out. 

Fascination  of  merchandise  never  gets  a  chance  to 
work  through  the  printed  word.  South  American 
stores  spend  considerable  sums  of  money  in  advertis- 
ing, but  seldom  select  attractive  offerings  for  indi- 
vidual description,  much  less  build  themselves  up  in- 
stitutionally, like  oui'  gTcat  stores,  by  frequent  talks 
about  policy.  Announcements  in  the  newspapers  are 
on  the  general  level  of  our  cheapest  bargain  sale  em- 
poriums, with  the  everlasting  "Sale"  theme: 

LlQUIDACIOIT  ! 
LiQUIDACION  ! ! 
LiQUIDACION  !  !  ! 

The  secret  of  doing  a  big  business  in  a  little  space 
by  turning  over  stock  like  the  United  Cigar  Stores  has 
not  yet  been  gi^asped.  Rents  are  high  in  South  Ameri- 
can cities,  yet  in  the  main  shopping  streets  of  Buenos 
Aires  and  Rio  de  Janeiro  one  mav  see  tobacconists, 
with  about  one-tenth  as  much  stock  as  Mr.  Whalen's 
organization  would  pack  into  a  shop  with  200  square 
feet  of  area,  occupying  almost  enough  space  for  a 
Woolworth  five-and-ten-cent  store.  Not  only  one- 
tenth  the  quantity,  too,  but  hardly  one-tenth  the 
variety.     Every  Yankee  who  goes  to  South  America 


112       BUSmESS  IN  SOUTH  AMEEICA 

has  a  bone  to  pick  witli  our  tobacco  interests  for  their 
neglect  of  that  continent,  either  as  exporters  or  re- 
tailers, a  neglect  brought  home  immediately  by  in- 
ability to  obtain  familiar  American  brands. 

Creative  buying  is  another  undeveloped  field — the 
teamwork  with  manufacturers  by  which  the  Woolworth 
organization  stocks  an  acre  of  counters  with  articles 
made  to  sell  within  a  price  limit.  If  a  South 
American  mercantile  wizard  undertook  to  start  a  ten- 
and-twenty-centavo  store,  the  range  of  goods  available 
there  to-day  would  probably  be  smaller  than  that  with 
which  young  Frank  Woolworth  stocked  his  first  pack- 
ing-case counter.  This  sort  of  merchandise  is  scattered 
in  a  dozen  different  lines  of  retailing,  and  sold  with 
small  turnover,  at  double  or  treble  our  prices  to  the 
consumer. 

It  must  be  frankly  admitted  that  the  extension  of 
American  retail  methods  to  the  Southern  continent  will 
be  no  "snap."  Custom  must  be  changed,  prejudice 
overcome,  competition  met.  But  neither  is  it  a  snap  to 
establish  American  branch  banks,  American  shipping 
lines,  and  other  business  essentials.  One  thing  is  clear 
— that  American  methods  of  retailing  have  original 
merit,  and  have  worked  wonders  at  home.  Applied 
intelligently  and  patiently  in  South  America,  with 
careful  preliminary  studies,  and  first  rate  manage- 
ment, they  will  work  wonders,  too,  and  be  invaluable 
tools  in  the  extension  of  our  trade. 


CHAPTER  IX 

THE   TOOLS   OF   THE   TRADE— AMERICAN   CONSUMER 

ADVERTISING 

One  indispensable  tool  of  our  trade  in  South  Amer* 
ica  is  consumer  advertising  on  American  lines. 

It  is  hardly  necessary  to  explain  to  American  busi- 
ness men  of  to-day  the  value  of  advertising  to  increase 
consumer  demand,  facilitate  distribution,  and  effect 
economies  in  selling  cost.  Principles  and  methods  have 
been  thoroughly  worked  out. 

In  South  America,  for  various  reasons,  our  business 
concerns  do  not  yet  back  their  selling  effort  with  con- 
sumer advertising — at  least,  not  to  the  same  extent  aa 

at  home. 

Sometimes  this  neglect  is  due  to  a  belief  that  the 
South  American  public  is  different  from  that  at  home, 
and  that  the  same  principles  of  advertising  will  not 
answer.  Again,  the  mistake  is  made  of  assuming  that 
American  advertising  methods  can  be  extended  to  the 
Southern  continent  ^vithout  change  or  adaptation. 
Both  views  are  wrong.  j 

In  the  belief  that  advertising  can  be  placed  by  the 
same  methods  and  machinery  used  in  the  United 
States,  some  of  our  advertising  agencies  got  together 
during  the  war  to  give  their  clients  service  thi'oughout 

113 


114       BUSmESS  IIsT  SOUTH  AMEKICA 

Latin  America.  Connections  were  made  witli  pub- 
lishera  in  the  Southern  countries,  and  a  commendable 
advertising  campaign  conducted  in  the  United  States 
to  interest  business  concerns  with  Latin  American 
trade.  The  purpose  was  to  simplify  advertising  to  such 
an  extent  that  an  order  placed  in  New  York  or  Chicago 
would  set  the  publicity  wheels  running  in  Eio  de 
Janeiro,  Buenos  Aires,  Santiago,  and  so  on. 

From  the  writer's  observation,  this  plan  did  not 
work  well,  or  had  not  begun  to  work  at  the  time  of  his 
visit  to  South  America.  Publishers  there  who  had 
entered  into  promising  contracts  complained  that  they 
were  receiving  little  business  from  the  United  States. 

South  America  is  different  from  our  country  in 
advertising  matters  because,  where  we  have  efficient 
agencies  in  every  business  center,  practically  but  one 
city  on  the  Southern  continent  has  real  advertising 
agencies — Buenos  Aires.  There  is  little  need  for 
agency  service  in  the  other  countries  as  yet.  For  lack 
of  industries  corresponding  to  our  ovsm,  none  of  them 
has  national  advertising.  Advertising  is  chiefly  re- 
tail, local,  and  placed  without  agency  service.  There 
may  be  a  few  nationally  exploited  brands  of  cigarettes, 
beverages  and  the  like,  but  there  it  ends.  Even  the  two 
or  three  advertising  agencies  in  Buenos  Aires  do  largely 
a  local  business. 

This  is  what  happens  when  we  assume  that  our  own 
methods  can  be  transplanted  bodily. 

And  when  we  assume  that  the  South  American 
public  is  different,  we  err  in  the  other  direction. 
Salesmen  are  sent  to  create  a  market.     They  place 


TOOLS  OF  TEADE— ADVEETISING     115 

American  goods  on  merchants'  shelves.  At  this  point 
a  moderate  expenditure  in  consumer  advertising  might 
increase  sales,  and  also  aid  in  making  the  trade  per- 
manent. But  we  fail  to  make  the  little  adjustments 
that  would  adapt  our  advertising  principles  to  that 
field,  because  we  fancy  that  South  Americans  are  dif- 
ferent from  ourselves,  and  so  lose  opportunities  that 
may  never  come  again. 

South  America  is  different,  but  chiefly  in  its  ways 
of  doing  business.  Its  differences  are  geogTaphical,  and 
due  to  spread  of  the  countries,  their  population  and  in- 
dustries, their  latitude  or  altitude,  their  difficulties  and 
credit. 

But  the  South  American  is  much  like  ourselves, 
himianly.  He  will  respond  to  a  basic  advertising  ap- 
peal. He  admires  our  advertising  skill,  and  the  scar- 
city of  good  advertising  on  his  continent  makes  a  back- 
ground against  which  our  vigorous  publicity  stands 
out. 

American  concerns  have  not  yet  begun  advertising 
on  tEeSouthern  continent  because  their  trade  there 
is  still  regarded  as  a  side  issue.  But  gi-owth  will  event- 
ually drive  them  to  it,  if  competition  doesn't.  Before 
the  European  war  began,  a  Montevideo  importer,  visit- 
ing !N"ew  York,  was  beset  by  export  managers  for  popu- 
lar automobiles,  who  wanted  him  to  take  the  entire 
South  American  continent  as  selling  representative. 
Three  years  later,  one  of  these  motor  concerns  was 
building  its  own  assembling  plants  in  South  Ajnerica. 
At  the  same  period,  one  of  our  popular  lines  of  toilet 
goods  was  distributed  in  Rio  de  Janeiro  by  a — hard- 


116       BUSINESS  m  SOUTH  AMEKICA 

ware  importer!  Today,  the  turnover  of  that  line  in 
Brazil  is  worth,  it  is  said,  $100,000  profit  yearly. 

We  will  never  get  anywhere  in  South  America  until 
we  sit  down  and  think  out  the  advertising  proposition 
along  the  lines  that  build  business  at  home. 

Outlets  for  goods  come  first.  Advertising  will  not 
force  distribution.  There  must  be  somebody,  even  if  in 
but  two  or  three  major  countries,  or  the  big  cities,  who 
imports  the  goods  and  places  them  with  retailers. 
American  manufacturers  have  been  advised  to  begin 
business  in  South  America  by  such  kindergarten 
methods  as  circularizing  merchants  from  the  United 
States,  sending  samples  by  parcel  post,  and  the  like. 
These  methods  sometimes  succeed  because  the  goods 
are  ingenious,  high-class  and  desirable.  But  tbey  have 
lately  been  used  by  unscrupulous  American  "export 
agents,"  and  are  not  in  very  good  favor  with  South 
American  business  men.  Outlets  must  be  established 
as  in  the  United  States — ^by  personal  visits  and  inten- 
sive saleswork. 

Then,  on  the  basis  of  present  sales,  or  the  estimated 
business  to  be  built  up  in  a  given  country,  an  adver- 
tising appropriation  can  be  made  and  a  definite  plan 
worked  out,  taking  the  suggestions  of  the  importer 
about  distribution  and  mediums.  He  may  be  willing 
to  undertake  a  campaign  on  teamwork  lines,  supple^ 
menting  the  appropriation  with  his  own  money.  He 
will  probably  be  the  best  man  to  select  mediums  and 
place  the  advertising,  or  supplement  goods  in  country 
districts  with  signs,  window  material  and  counter  disr 
play. 


TOOLS  OF  TEADE— ADVERTISING     117 

Take  the  Latin  American's  advice  in  the  tilings  that 
are  different  unless  your  own  representative  can  be  sent 
to  study  the  field.  He  will  know  how  demand  and  dis- 
tribution in  Argentina  differ  from  Brazil;  why  Uru- 
guay and  Paraguay  are  neighbors,  but  as  far  apart,  as 
the  poles  commercially ;  the  difference  in  the  Spanish  of 
Chile  and  Pei-u;  that  Chile  comes  nearest  having  a 
real  middle  class,  and  that  Peru  and  Bolivia  are  far- 
thest from  it,  and  among  the  poorest  nations  in  purchas- 
ing power;  the  futility  of  trying  to  sell  the  Argentina 
gaucho  imported  goods  which  find  a  market  in  Buenos 
Aires,  and  the  little  known  luxury  demand  far  up  in 
Tucuman,  where  French  milliners  and  modistes  jour- 
ney to  sell  the  latest  Parisian  fashions  to  women  in  offi- 
cial circles. 

But  when  it  comes  to  the  advertising  itself,  be  an 
American,  and  regard  the  South  Americans  as  just — 
people.  They  will  respond  to  the  same  appeals  that  in- 
fluence people  at  home  if  a  few  adjustments  are  made 
for  viewpoint.  Because  you  are  a  Yankee,  the  South 
American  expects  a  characteristic  appeal  and  striking 
information. 

At  home,  consumer  advertising  is  keyed  on  such 
themes  as  pride  in  appearance,  one's  home  and  chil- 
dren, the  community;  appetite,  comfort,  service;  in- 
creased earning  power  and  the  saving  of  labor,  time  and 
money.  With  a  few  exceptions  and  proper  adjust- 
ments, these  appeals  are  as  effective  on  the  Southern 
continent,  and  their  very  novelty  there  gives  them 
force. 

If  our  normal  exports  before  the  war  are  investigated 


118       BUSmESS  IN  SOUTH  AMEKICA 

it  will  be  found  that  we  sold  two  general  classes  of 
goods.  First,  bulky  .stuff  like  steel,  lumber,  flour,  oil, 
paints  and  so  forth.  Second,  machinery,  tools,  office 
devices  and  things  characteristically  ours.  In  adver- 
tising the  latter  at  home,  we  hit  straight  for  the  pros- 
pective purchaser's  pocketbook  in  many  cases,  offer- 
ing to  save  his  labor^  money,  time,  property.  In  Latin 
America,  however,  people  have  not  yet  begun  to  figure 
time  or  work  as  carefully  as  we  do.  When  you  have  a 
costly  form  of  transportation  like  a  motor  truck,  time 
may  be  worth  saving.  But  if  you  are  hauling  by  ox 
cart,  what  is  time  to  oxen  or  peons  ?  Offer  to  save  time 
for  the  Latin  American  and  he  will  ask  ^'Yes,  seiior — 
but  why  V^  Nor  does  he  regard  his  property  in  terms 
of  upkeep.  Even  in  the  saving  of  money  he  is  a  gener- 
ation behind  (or  maybe  it  is  ahead!)  of  people  in  older 
countries  under  industrial  pressure. 

To  the  Briton  the  Latin  American  looks  for  solid 
textiles,  hardware  and  other  staples,  distinguished  by 
trade-marks  familiar  for  several  generations.  To  the 
German^ 'he  looked  for  cheapness,  long  credit,  money 
advances  against  crops,  and  slick  schemes  for  beating 
the  customs  house.  But  to  the  Yankee  he  looks  for 
clever  inventions,  and  printed  explanation  thereof,  and 
when  this  field  is  viewed  from  all  the  angles  of  possibil- 
ity it  is  the  hardest  for  us,  and  first  in  advertising. 

When  the  first  computing  scales  were  brought  into 
Montevideo  by  a  sanguine  importer  some  years  ago  the 
conservative  IJruguayan  storekeeper  was  interested, 
yet  skeptical.  He  could  figure  his  little  country's  good 
decimal  money  in  his  head — as  quick  as  that?     Save 


TOOLS  OF  TEABE— ADYEETISING     119 

time — pero  por  que,  senor?  But  to-day  computing 
scales  are  found  far  back  in  the  country,  because  they 
hav3  demonstrated  their  value. 

Europe  sold  the  South  American  automobiles  before 
the  war,  taking  his  measure  for  special  bodies  gorgeous 
in  brass  fittings.  The  Yankee  automobile  man  is  tak- 
ing his  measure  for  good  roads  and  motor  trucks,  so  he 
can  get  his  products  to  market  more  cheaply. 

Europe  filled  his  home  with  showy  furniture  and  ar- 
tistic clap-trap.  The  Yankee  is  demonstrating  that 
home  can  be  comfortable,  with  plumbing,  heating,  indi- 
rect lighting,  electrical  conveniences,  sanitation.  Even 
so  obvious  a  thing  as  a  fly-screen  is  more  or  less  new  to 
him.  But  he  grows  enthusiastic  about  comfort  when  he 
visits  the  United  States,  and  is  helping  himself  to  it 
from  the  pages  of  our  home-making  magazines.  These 
not  only  have  a  wide  sale,  but  subscription  agents  of- 
fer them  in  combination.  The  Latin  American  learns 
English  to  read  them,  or  gets  ideas  from  the  pictures. 

Walking  out  into  South  American  residential  sub- 
urbs, one  w411  pass  rows  of  houses  built  in  the  massive 
Spanish  style,  with  their  inner  gardens,  or  patios. 
Then,  in  between,  there  will  be  a  frame  bungalow  ex- 
actlv  like  our  own  suburb  houses — alike  to  the  smallest 
detaJ!  because  it  has  been  copied  bodily  out  of  some 
American  home-building  magazine,  or  erected  from 
American  ready-made  plans,  testimony  to  the  growing 
popularity  of  our  architecture  on  the  Southern  conti- 
nent and  the  recognition  of  its  adaptability  to  the  tem- 
perate climates  for  which  the  Spanish  house  is  un- 
suited. 


120     busi:ness  m  south  amekica 

There  is  a  growing  interest  in  our  ready-made  clotli- 
ing,  though  it  is  handicapped  by  high  tariffs.  Some  of 
our  food  specialties  are  beginning  to  attract  attention, 
but  they  are  handicapped  by  cost,  and  also  conservatism 
in  food  that  amounts  almost  to  standardization.  Labor 
saving  devices  in  the  home  do  not  yet  make  a  strong 
appeal  because  home  routine  is  a  matter  for  servants, 
and  the  idea  of  saving  their  time  and  strength  is  novel. 
But  they  can  be  introduced  by  teaching  along  the  lines 
of  comfort  and  health.  Pride  in  personal  appearance 
appeals  strongly  to  the  Latin  American,  and  likewise 
pride  in  children  and  the  family,  one  of  his  strongest 
affections.  The  desire  for  self-improvement  through 
education  and  increased  earning  power  is  also  strong. 

Our  advertising  methods  are  an  essential  part  of 
our  production  and  distribution.  Here  is  a  factor  that 
distinguishes  us  from  European  competitors,  some- 
thing that  we  do  better  than  anybody  else.  To  omit 
advertising  in  world  markets  is  to  hamper  ourselves, 
and  deprive  customers  abroad  of  something  not  merely 
essential  to  our  products,  but  something  that  they  ad- 
mire and  want. 

^^What  does  such  a  propaganda  cost  ?"  asked  a  Buenos 
Aires  professor,  referring  to  an  American  magazine 
campaign  against  venereal  disease.  "Two  thousand 
dollars  for  this  one  announcement?  !N"early  five  thou- 
sand pesos!  And  paid  for,  it  says,  by  public-spirited 
men  and  women.  That  is  true  patriotism.  Hasten 
the  day  when  we  Argentines  exhibit  such  enlightened 
love  of  country." 


TOOLS  OF  TKADE— ADVEKTISING     121 

The  mechanism  of  advertising  in  South  America 
need  not  present  difficulties. 

Copy  should  be  as  characteristically  American  as 
possible.  The  text  alone  should  be  turned  into  idioma- 
tic Spanish  or  Portuguese,  with  modifications  in  the 
illustrations  to  give  South  American  atmosphere,  and 
adjustments  to  South  American  conditions.  After  that, 
our  striking  typography  and  lay-outs  should  be  re- 
tained, because  they  have  gi-eat  force  against  the  drab 
backgTound  advertising  as  it  is  done  on  the  Southern 
continent. 

Latin  American  newspapers  are  solid  masses  of  close- 
ly set  advertising,  much  of  it  classified.  Where  we 
make  advertising  easy  to  read,  the  Latin  American  ad- 
vertising man  makes  his  readers  work  hard  for  a  very 
small  amount  of  actual  business  information.  !N^ews  is 
massed  on  the  inner  pages  of  the  daily  papers,  while 
advertising  is  massed  solidly  on  other  pages.  Usually 
the  first  page  of  a  Latin  American  newspaper  is  solid 
advertising,  and  the  happenings  of  the  day  must  be 
sought  inside  the  journal.  To  the  credit  of  Latin 
American  newspaper  publishers,  however,  it  may  be 
said  that  they  are  now  studying  and  adapting  our 
methods  of  making  news  attractive  and  better  writing, 
display  and  lay-out  of  advertising  will  follow. 

Much  of  the  American  advertising  copy  published  in 
South  America  is  prepared  in  the  United  States,  Eng- 
lish announcements  being  translated  by  Spaniards,  Por- 
tuguese or  Latin  Americans.  This  method  is  not 
entirely  satisfactory.  Our  advertising  gains  force 
through  its  colloquialisms,  and  when  these  are  turned 


122       BUSESTESS  IN  SOUTH  AMEKICA 

into  Spanisli  or  Portuguese  equivalents  tliej  lose  their 
tang.  Each  of  the  Southern  countries  has  its  own  collo- 
quialisms, and  where  copy  is  translated  or  adapted  by 
people  familiar  with  a  given  country  and  its  idiom,  it 
is  often  possible  to  secure  the  same  striking  effect. 

One  large  American  corporation  with  a  branch  in 
Buenos  Aires  follows  the  plan  of  submitting  advertis- 
ing in  English,  from  the  United  States,  to  its  whole 
office  force,  made  up  of  both  Americans  and  Argen- 
tinos.  Each  person  makes  a  translation  or  adaptation 
into  Spanish.  Then  a  meeting  is  held,  the  translations 
are  compared,  good  phrases  from  one  version  substi- 
tuted for  awkward  translations  in  another,  and  a  com- 
posite advertisement  in  the  Argentine  language  worked 
out. 

It  is  usually  news  to  most  Americans  that  Argentina 
has  a  language  of  its  own,  rich  in  local  expressions. 
But  it  is  true,  and  Brazil,  Chile,  Uruguay,  Peru  and 
the  other  South  American  countries  likewise  have  their 
racy,  local  idioms. 

As  an  illustration,  our  Middle  Western  phrase  "I'll 
say  so!"  has  been  widely  used  in  advertising  the  past 
few  years.  Such  an  advertisement  was  sent  to  a 
Buenos  Aires  agency  for  translation.  Instantly  the 
translator  substituted  an  Argentino  colloquialism — 
"Crea  los !"  That  means  "Believe  us !"  a  phrase  used 
daily  by  the  Argentines. 

As  an  example  of  the  blundering  possible  without  in- 
timate knowledge  of  idiom  may  be  cited  the  advertise- 
ment in  which  a  Spanish  student  in  the  United  States 
tried  to  convey  the  idea  that  a  certain  business  house 


TOOLS  OF  TRADE— ADVEETISING  123 

stood  first  in  its  line.  "Primera'*  was  the  word  he 
should  have  used  but  ^^primitiva"  appeared  in  the  copy 
— meaning  that  the  concern  was  primitive! 

Pictures  seem  to  offer  countless  opportunity  for 
blundering.  Again  and  again  the  Argentines,  Chileans 
aud  Uruguayans  are  confronted  with  advertising  illus- 
trations made  in  the  United  States  and  supposed  to  bo 
typically  South  American,  showing  men  wearing  broad 
Mexican  sombreros,  with  palm  trees  in  the  background. 
Of  course  tlie  sombrero  is  no  more  common  in  Buenos 
Aires  or  Santiago  than  in  Boston,  nor  palm  trees  any 
more  plentiful  than  in  Chicago. 

Far  more  effective  are  pictures  and  diagrams  show- 
ing the  way  to  use  goods.  A  patent  American  lead  pen- 
cil was  introduced  into  Argentina  by  a  Cuban  with  long 
experience  in  American  business  and  advertising  meth- 
ods. He  found  that  not  one  purchaser  in  ten  knew 
how  to  fill  or  use  this  pencil,  so  he  engaged  a  clever 
Buenos  x\ires  artist,  and  had  him  draAV  three  line 
sketches  showing  hands  filling  the  pencil  and  writing 
with  it,  which  not  only  overcame  difficulties  encounter- 
ed by  people  who  didn't  understand  the  contrivance, 
but  were  silent  demonstrations  for  selling  the  article  to 
new  customers. 

In  the  absence  of  advertising  agencies,  arrangements 
can  be  made  through  importers  or  other  representa- 
tives. Some  of  them  are  men  who  frequently  visit  the 
United  States  and  give  skillful  team  play  in  extending 
the  advertising  methods  of  American  houses  through 
their  own  territory.  Our  branch  banks  have  commer- 
cial departments  in  charge  of  men  familiar  with  South 


124       BUSmESS  IN  SOUTH  AMEKICA 

American  newspapers  and  other  mediums,  and  are  glad 
to  advise  and  assist.  Each  important  city  has  its  news- 
papers representing  different  classes  and  parties.  The 
tendency  is  really  toward  too  many  newspapers  of  small 
circulation,  by  our  standards.  The  more  influential  a 
newspaper  may  be  editorially,  the  smaller  its  circula- 
tion, because  public  opinion  is  formed  chiefly  by  a 
little  minority  of  intellectuals  and  politicians.  Hardly 
a  half  dozen  Latin  American  dailies  exceed  100,000 
circulation,  and  the  average  is  probably  nearer  25,000. 
Country  circulation  has  not  been  developed.  A  train 
boy  may  supply  all  the  copies  sold  along  the  line  dur- 
ing a  day's  railroad  journey,  and  for  every  newspaper 
he  will  sell  two  or  three  lottery  tickets.  Weekly  and 
monthly  magazines  are  popular.  Trade  and  farm 
journals  are  not  common.  The  general  run  of  adver- 
tising is  stereotyped,  badly  illustrated  with  pictures 
taken  from  American  and  European  sources,  non-in- 
formative, humorous  or  punning  in  its  appeals,  and 
running  unchanged  months  at  a  time.  On  behalf  of 
Latin  American  publishers,  however,  one  must  add 
that  they  are  to-day  studying  our  news,  mechanical,  ad- 
vertising and  circulation  methods,  and  have  begun  to 
apply  them  under  great  difficulties  of  distance  and  ex- 
pense. La  NaciSn  and  Ld  Prensa,  the  great  Buenos 
Aires  dailies,  both  have  offices  in  ^ew  York  City  for 
advertising  as  well  as  editorial  service. 

Periodical  advertising  in  South  America  reaches  the 
upper  classes,  but  the  lower  classes  make  up  sixty  to 
seventy  per  cent  of  the  population. 

Our  advertising  is  overwhelmingly  middle-class  in 


TOOLS  OF  TRADE— ADVERTISING     125 

its  appeal,  and  there  is  scarcely  any  middle  class  in  the 
Latin  American  countries.  Yet  while  lower-class  pur- 
chasing power  is  limited,  and  illiteracy  high,  one  finds 
imported  goods  on  the  shelves  of  retailers  in  country 
districts,  and  in  the  poorer  sections  of  cities.  Yankee 
tools  for  the  mechanic  and  farm  implements  for  the 
peon  furnish  a  basis  for  technical  explanation.  This 
part  of  the  population  may  be  unable  to  read,  but  is 
still  intelligent,  receptive,  skillful.  Results  can  be  se- 
cured through  sigTis,  window  and  counter  display,  ex- 
planatory pictures,  and  demonstrations.  To  cover  the 
cities  and  neglect  the  gi^eat  country  and  working  class 
population  of  Latin  America  is  to  fail  to  invest  in  the 
future.  For  Latin  America  is  entering  upon  gi-eat  ma- 
terial developments.  Its  submerged  population  is  be- 
coming more  active  politically,  demanding  better 
economic  conditions,  earning  power,  education  and 
comfort.  It  is  rising  into  a  middle  class,  and  every 
step  in  that  direction  will  add  to  the  balance  and  well- 
being  of  the  Latin  American  countries. 

American  business  houses  on  the  Southern  continent 
frequently  have  difficulties  with  printing.  Specializa- 
tion in  typogi'aphical  display,  engraving,  color  print- 
ing and  other  lines,  familiar  at  home,  are  practically 
unknown.  Paper  and  printing  materials  are  expensive, 
type  faces  and  composition  are  different  from  ours,  and 
the  general  result  is  often  disappointing.  There  is  a 
growing  demand  for  printed  matter  in  English,  but 
such  work  must  usually  be  secured  in  shops  where  only 
Spanish  or  Portuguese  is  understood.  In  Rio  de  Ja- 
neiro, for  example,  a  weekly  magazine  launched  by  the 


126       BUSmESS  m  SOUTH  AMEKICA 

American  colony,  was  so  distributed  that  two  printing 
offices  set  up  the  news  matter,  another  one  the  adver- 
tisements, engraving  was  done  in  three  different  plants, 
and  two  separate  plants  did  the  actual  printing,  after 
which  the  sheets  were  handed  over  to  a  binder  for  the 
final  operation.  Every  new  branch  of  an  American 
house  established  on  the  Southern  continent  needs  print- 
ed matter,  and  an  industry  like  one  of  the  large  Amer- 
ican packing  houses  requires  several  thousand  dollars' 
worth  of  labels,  wrappers,  leaflets  and  pamphlets 
monthly.  In  the  major  cities  there  are  probably  op- 
portunities for  the  establishment  of  new  printing  of- 
fices equipped  to  supply  this  new  demand,  turning  out 
work  under  the  supervision  of  AmeriGans  familiar 
with  American  methods  and  requirements. 


X 


CHAPTEK  X 

DOING   BUSINESS   WITH  SOUTH   AMEEICA 

"But,  Mr.  Gonzales!"  protested  the  American  visi- 
tor, "I've  been  here  half  an  hour,  and  you  want  to  be- 
gin our  business  after  dinner.  They  tell  us  at  homo 
that  vou  South  Americans  be";in  to  talk  business  only 
after  a  half  dozen  calls." 

The  speaker  was  an  American  business  man,  making 
his  first  tour  of  South  American  branches.  Senor  Gon- 
zales, his  representative  in  the  first  port,  was  a  large 
importer.     He  spoke  English  perfectly. 

"Wliy,  that  is  the  characteristic  of  you  Yankees!" 
he  replied,  humorously.  "Even  after  a  half  dozen 
visits  you  will  not  talk  business.  See  this  letter.  It 
has  taken  two  months  to  get  it,  an  answer  to  specific 
inquiries.  It  is  full  of  flowers.  We  Latins  are  sup- 
posed to  be  fond  of  flowers.  But  it  does  not  give  the 
business  information  I  need.  I  know  that  I  am  es- 
teemed and  respected — but  does  their  price  mean  F. 
O.  B.  factory,  or  F.  O.  B.  steamship,  or  C.  I.  F.  ?  I 
believe  that  they  have  the  Honor  to  be  always  my  most 
respectful  and  obliging  servants — but  when  can  they 
make  deliveries?" 

Distance  lends  enchantment,  and  because  he  is  so 
far  off  we  have  idealized  the  South  American  a  little 

127 


128       BUSmESS  IN  SOUTH  AMEEICA 

too  mucli  for  our  own  good.  To  be  sure,  lie  likes  the 
flowers  of  speech  and  manners,  and  works  to  live  where 
we  often  live  to  work.  But  there  is  more  practicality 
and  directness  about  him  in  business  matters  than  we 
suppose,  for  he  has  to  do  business  under  handicaps 
little  known  in  the  United  States. 

There  is  the  handicap  of  distance,  which  involves 
planning  and  purchasing  months  ahead,  and  careful 
credit  arrangements.  He  does  business  with  half  a 
dozen  foreign  countries,  in  different  currencies,  and 
with  different  shipping  arrangements.  The  currency 
of  his  own  country  fluctuates  from  day  to  day,  so  ex- 
change enters  into  all  his  transactions,  where  we  do 
business  in  the  single  stable  dollar.  All  his  goods  must 
pass  through  a  tedious  customs  routine,  where  ours  are 
simply  unloaded  at  the  door  of  the  factory  or  store. 

He  may  not  be  disposed  to  talk  business  the  first  time 
you  call  upon  him,  but  there  is  probably  a  good  busi- 
ness reason.  It  is  steamer  day,  and  he  is  busy  with 
mail.  You  may  have  dropped  in  around  eleven  in  the 
morning,  at  home  a  convenient  business  hour,  but  in 
South  America  at  that  time  people  are  just  going  to 
breakfast.  He  asks  about  your  trip,  and  you  ask  about 
his  health,  and  then  an  appointment  is  made. 

Connections  mean  more  to  him  than  with  us,  as  do 
friendships.  The  specialty  salesman,  introducing  a 
single  article  through  small  orders,  cannot  work  profit- 
ably in  South  America.  Orders  are  large,  salesmen 
represent  broad  lines,  and  to  be  taken  care  of  intelli- 
gently by  those  you  buy  from  is  as  important  as  prices 
and  quality  of  goods.     Having  once  given  his  confi- 


BUSINESS  WITH  SOUTH  AMEKICA    129 

dence  to  a  house,  he  is  slow  to  change,  and  a  great  deal 
of  that  confidence  is  to  him  embodied  in  its  represen- 
tative, who  becomes  his  friend,  and  often  fights  for  his 
interest  ae^ainst  his  own  house. 

He  is  conservative,  sensitive,  sentimental,  but  a 
thorough  merchant,  because  constantly  doing  business 
with  the  whole  world.  His  requirements  in  merchan- 
dise, packing,  shipping  and  other  details  may  be  most 
exacting,  and  set  forth  in  minute  detail  because  ex- 
perience has  taught  him  what  is  best  in  his  own  coun- 
trv.  At  the  same  time,  he  is  interested  in  new  products . 
and  methods,  and  looks  to  Americans  for  such  things. 

In  the  United  States  we  do  business  largely  on  open 
accounts,  shipping  the  customer  whatever  he  orders, 
with  an  invoice,  and  sending  him  a  monthly  statement, 
which  he  pays. 

In  South  America,  on  the  contrary,  business  is  done 
in  individual  shipments,  each  accompanied  by  its  in- 
voice, bill  of  lading  and  draft.  This  is  so  much  more 
complicated  and  difficult  a  method  of  doing  business 
that  every  effort  made  to  simplify  it  is  appreciated  by 
South  Americans. 

Solid  and  well-managed  American  mercantile  houses 
had  been  doing  business  in  South  America  long  before 
the  war,  particularly  in  West  Coast  countries.  The 
oldest  concern  of  this  sort  dates  back  before  the  Civil 
War,  and  others  have  business  experience  extending  over 
a  generation.  Steady  gains  in  our  trade  demonstrated 
that  they  thoroughly  understood  the  South  Americans, 
and  that  in  business  methods  and  service  they  were 
quite  as  efficient  as  merchants  of  other  nations.     But 


130     BUsmEss  m  south  ameeica 

war  brouglit  abnormal  conditions,  hundreds  of  Amer- 
ican manufacturers  entering  tlie  South  American  ex- 
port field  for  the  first  time,  and  hundreds  of  emergency 
export  concerns  springing  into  existence  in  the  United 
States. 

/  We  began  our  war  business  with  them  by  demanding 
//  that  they  deposit  cash  in  l^ew  York  before  we  shipped 
if  goods.  When  we  found  that  the  South  American  paid 
I  his  bills,  we  trusted  him  to  the  extent  of  collecting 
(  through  drafts  when  the  goods  reached  him.  With  still 
better  acquaintance,  that  has  grown  to  drafts  dated  for 
collection  one  to  three  months  after  he  gets  the  goods. 
Finally,  not  a  few  American  concerns  are  opening  book 
accounts  with  their  South  American  customers.  This 
is  appreciated  because  it  gives  flexibility  in  ordering. 
Where  each  shipment  involves  taking  up  financial  docu- 
ments, the  South  American  customer  may  wait  until 
he  can  mass  his  requirements  in  a  substantial  order. 
If  he  is  rendering  service  to  his  customers  on  something 
like  automobile  repairs,  they  may  have  to  wait  for  ar- 
ticles out  of  stock.  But  with  the  open  account  he  can 
send  orders  as  shortages  loom  up.  With  drafts  accom- 
panying each  shipment,  to  be  paid  before  he  can  get  the 
bill  of  lading  and  secure  the  goods,  there  is  often  a 
loss  on  exchange  amounting  to  a  tidy  profit.  But  with 
the  open  account  he  can  choose  time  when  exchange  is 
favorable  to  buy  a  draft  for  payment. 

To  our  credit,  a  few  American  concerns,  at  least, 
went  straight  to  liberal  terms  without  this  long  process 
of  education.  The  outbreak  of  war  in  Europe  brought 
depreciation  in  South  American  currencies  of  five  per 


busi:n'ess  with  south  America  isi 

cent  and  upwards.  A  New  York  piano  manufacturer 
with  numerous  customers  among  South  American  music 
dealers,  found  the  latter  slow  in  paying  bills.  The 
depreciation  of  their  own  currencies  practically  ab- 
sorbed their  profits  on  his  pianos.  Instead  of  bringing 
pressure  to  bear  upon  them,  he  voluntarily  extended 
their  obligations,  and  told  them  not  to  worry.  His 
money  was  tied  up  several  months,  until  realization 
of  the  scarcity  of  merchandise  made  South  America 
an  eager  purchaser.  In  only  one  case  was  there  any 
loss,  through  a  customer  who  was  dishonest  anyway, 
and  would  have  been  a  bad  credit  risk  in  normal  times. 
Every  other  customer  paid  within  a  few  months,  and 
appreciation  of  his  fair  dealing  has  made  strong  friends 
all  over  the  Southern  continent. 

Almost  the  first  thing  the  ISTorth  American  wants 
about  the  South  American  is  credit  information.  This 
was  once  obtainable  only  with  difficulty,  but  to-day 
can  be  secured  easily  enough. 

It  seldom  occurs  to  the  ISTorth  American  that  South 
Americans  need  information  about  the  concerns  from 
which  they  contemplate  purchasing.  Yet  it  is  so,  and 
the  burden  of  information  is  heaviest  upon  the  seller. 
When  the  seller  knows  that  the  South  American  is 
financially  responsible,  and  also,  perhaps,  that  he  is 
a  capable  representative,  he  is  satisfied.  But  the  South 
American  wants  to  know  whether  the  ^STorth  American 
concern  has  facilities  for  properly  packing  and  shipping 
export  orders,  whether  it  is  prompt  and  sensible  in  ad- 
justing damage  claims  and  en-ors,  whether  it  has  a 
reputation  for  backing  up  its  representatives  in  other 


132       BUSINESS  IN  SOUTH  AMEKICA 

countries  when  consumer  demand  in  tlie  United  States 
is  insatiable.  This  sort  of  information  is  so  important 
that  American  houses  seeking  business  in  South  Amer- 
ica will  do  well  to  supply  it.  One  of  our  big  banking 
organizations  with  branches  abroad  not  only  collects 
credit  information  about  South  American  concerns, 
but  investigates  concerns  here  at  home  desirous  of 
.  entering  export  trade,  studying  their  facilities  for  sell- 
yI  ing  abroad,  making  suggestions  for  improvement,  and 
protecting  South  American  buyers  against  incompetent 
would-be  exporters. 

Detailed  shipping  instructions  accompany  South 
American  orders,  and  should  be  literally  followed. 
Very  often  the  requirements  seem  trivial.  Why  should 
a  small  order  of  goods  be  packed  in  two  separate  boxes 
when  one  will  easily  hold  them  all?  Why  should  an 
obscure  slow  line  of  steamers  be  specified  when  there 
are  large,  fast  ships  to  the  same  port  ?  Why  should  ad- 
vertising matter,  enclosed  with  the  goods,  be  carefully 
limited  by  weight?  Why  should  a  shipment  be  split 
up  into  packages  not  exceeding  one  hundred  pounds 
in  weight? 

Viewed  from  South  America,  these  are  all  reason- 
able requests.  Several  kinds  of  goods  packed  in  one  box 
may  lead  to  the  highest  tariff  rate  on  all,  whereas  some 
of  them  would  be  charged  a  lower  rate  if  packed  separ- 
ately. The  buyer  may  prefer  the  slow  steamship  line 
because  it  docks  near  his  warehouse,  saving  cartage. 
Advertising  matter  may  be  limited  to  a  pound  or  two 
because  that  amount  enters  his  country  free  when 
packed   with   goods  which    it    exploits,    where  excess 


BUSi:^ESS  WITH  SOUTH  AMERICA    13 


weight  pays  duty,  as  would  the  same  quantity  of  adver- 
tising material  sent  separately.  Packages  not  exceed- 
ing one  hundred  pounds  means  that  goods  are  destined 
for  transportation  on  the  backs  of  horses,  mules  or  even 
men,  far  up  in  mountain  districts  where  railroads  are 
lacking,  as  on  the  West  Coast. 

It  has  been  said  that,  while  the  United  States  is  a 
protective  tariff  country,  it  is  also  the  greatest  exam- 
ple of  free  trade  in  the  world,  because  goods  pass 
throughout  the  forty-eight  states  with  no  duties  or  for- 
malities. For  this  reason,  thousands  of  American 
manufacturers  and  merchants  fail  to  realize  what  tar- 
iffs mean  in  South  America,  where  there  are  ten  differ- 
ent republics,  each  with  its  tariff  complexities,  and  each 
differing  from  all  the  others.  It  takes  a  professional 
customs  expert  or  ^'despechante,"  to  keep  posted  on  all 
the  regulations,  and  pass  goods  through  the  formalities. 
Trivial  oversights  in  packing,  description,  classification, 
valuation  and  the  like  will  lead  to  fines  and  delays.  A 
shipment  of  goods  may  pay  not  only  tariff  duty,  but 
part  of  that  duty  would  be  demanded  in  gold  and  the 
balance  in  paper  currency.  Then  there  may  be  a  sur- 
tax upon  the  duty,  and  if  the  goods  are  subject  to  in^ 
ternal  revenue,  there  will  be  a  further  charge  for 
stamps  on  each  bottle  of  perfumery  or  tin  of  tooth  paste. 
Oversights  may  impose  a  fine  on  top  of  that.  It  takes 
from  two  weeks  to  two  months  to  pass  goods  through 
South  American  customs  houses,  and  tariff  laws  are  so 
complicated  by  special  rulings  that  in  some  countries 
the  latter  are  published  daily. 

There  is  a  general  belief  in  the  United  States  that 


134       BUSmESS  m  SOUTH  AMEKICA 

we  have  excellent  parcel  post  arrangements  witli  South 
American  countries.  As  a  consequence,  Ameriqana 
blithely  mail  samples,  catalogues  and  small  orders  of 
merchandise  by  parcel  post.  To  be  certain  that  all  will 
go  well,  they  sometimes  address  such  shipments  in  care 
of  one  of  our  branch  banks.  Postal  officials  insist  that 
sei-vice  is  steadily  being  improved,  and  the  difficulties 
are  obviously  great.  Yet  much  complaint  and  friction 
arise  from  efforts  to  inaugurate  business  through  parcel 
post  facilities,  as  well  as  in  carrying  it  on,  and  such 
transactions  go  more  smoothly  when  American  concerns 
start  with  an  understanding  that  parcel  post  business 
is  complicated  rather  than  simple,  and  pay  detailed  at- 
tention to  technicalities. 

Parcel  post  shipments  have  been  encouraged  by  ex- 
port advisers,  as  an  illustration  of  the  ease  with 
which  a  beginning  can  be  made  in  South  American 
trade.  But  in  practically  every  South  American 
country  parcel  post  is  a  nuisance  rather  than  a  con- 
venience. All  packages  must  pass  through  customs. 
This  takes  from  a  week  to  a  month,  because  each 
package  is  opened,  its  contents  inspected,  and  duty 
assessed,  and  the  force  of  inspectors  is  small.  To  get  a 
package,  one  must  call  personally  at  the  post  office  or  cus- 
toms house,  pay  duty,  go  through  red  tape,  and  perhaps 
finally  discover  that  his  package  has  been  plundered. 

Picture  the  South  American  merchant  receiving  no- 
tice that  there  is  a  package  waiting  for  him  at  the  post 
office,  taking  two  or  three  hours  to  obtain  it,  paying 
duty  thereon,  only  to  discover  that  it  is  a  ten-cent  sam- 
ple of  merchandise  from  somebody  soliciting  an  order, 


busi:n'ess  with  south  America  135 

or  a  catalogue  of  goods  he  does  not  handle.  If  the 
catalogue  is  printed  in  more  than  one  color  he  may  have 
to  pay  fifty  cents  additional  duty  per  pound  weight. 

In  sending  catalogues  or  samples  to  South  American 
concerns  it  is  best  to  deliver  them  duty  paid.  Many 
of  the  prospects  one  wishes  to  reach  may  be  up  coun- 
try far  from  the  customs  house.  Such  material  can 
be  sent  ready  wi*apped  and  addressed  in  bulk  to  one's 
representative  at  the  chief  port,  with  instructions  to 
pay  duty  and  remail.  Our  express  companies  also 
have  facilities  for  handling  samples  and  catalogues  in 
bulk  paying  duty  and  mailing  to  addressees  without 
customs  charges  or  red  tape.  South  Americans  have 
become  somewhat  suspicious  of  samples  from  the 
United  States  because  this  long  distance  method  of 
selling  has  been  utilized  by  irresponsible  concerns  in 
the  United  States,  and  orders  placed  for  goods  on  par- 
cel post  sample,  accompanied  by  cash,  have  been 
filled  with  worthless  ''jobs"  and  ''rejects." 

The  mailing  of  catalogues,  circulars  and  letters  from 
the  United  States  under  domestic  postage  is  a  constant 
irritation  in  South  America,  where  the  recipient  must 
pay  double  the  shortage.  This  has  been  emphasized  / 
repeatedly  by  Uncle  Sam's  world  trade  advisers — and 
Uncle  Sam  himself  is  one  of  the  worst  offenders.  Thou- 
sands of  bulletins  and  official  announcement's  from 
Washington  turn  up  in  South  America  bearing  no  post- 
age at  all,  but  simply  the  frank  of  a  government  de- 
partment. Business  houses  communicating  regularly 
with  South  American  customers  let  letters  slip  into  the 
mail  under  domestic  postage.     The  remedy  is  to  put  all 


1 


136       BUSmESS  II!^  SOUTH  AMEEICA 

mail  in  charge  of  an  intelligent  clerk  who  will  sift  out, 
weigh,  and  correctly  stamp  everything  going  abroad. 
Another  safety  check  is  the  use  of  different  colored 
envelopes  for  foreign  mail  by  every  one  corresponding 
with  other  countries.  If  five-cent  stamped  envelopes 
are  employed  much  of  this  trouble  can  be  avoided. 

The  ^^manana"  habit  is  a  widely  advertised  trait  of 
the  South  American.  But  there  is  much  shiftlessness 
and  procrastination  in  our  own  business,  and  our 
brisk  hurry  often  masks  small  affairs.  Eeal  dispatch 
in  business  seems  to  go,  not  so  much  by  speed,  as  by 
the  condensation  of  great  aggregates  together.  Thus, 
Kansas  City  works  in  bigger  lots  than  Smithville,  and, 
therefore,  faster  and  Chicago  works  faster  than  Kan- 
sas City,  "New  York  faster  than  Chicago,  and  London 
faster  than  any  of  them.  London  makes  one's  head 
swim,  very  often,  with  its  pointblank  decision  on  some 
project  involving  millions  half  way  round  the  world. 
And  as  the  aggregates  grow,  the  business  way  becomes 
shorter. 

South  America  is  far  from  world  centers.  Its  busi- 
ness does  not  run  into  great  aggregates.  Transactions 
go  largely  by  steamer  days.  There  is  timie  for  the 
amenities.  The  South  American  is  often  careless  about 
appointments.  He  promises  to  come  to  your  hotel  to- 
morrow and  inspect  samples  because  it  pleases  you. 
But  to-morrow  he  may  forget  all  about  it.  An  amus- 
ing distinction  is  made  in  some  cities.  If  the  appoint- 
ment is  "English  time"  that  means  promptness  in 
keeping  it.  Otherwise,  an  hour  or  so  late  may  be 
considered  of  no  importance. 


BUSINESS  WITH  SOUTH  AMEKICA    137 

Speculation  in  imported  goods  is  very  common  in  // 
South  American  countries.  Merchants  sometimes  lose 
sight  of  distribution  in  their  effort  to  effect  a  tempor- 
ary "corner"  in  an  imported  commodity,  turning  a 
speculative  profit.  We  have  our  o^vn  speculations  in 
merchandise  at  home,  hut  they  are  spread  out  over 
whole  seasons,  in  the  shape  of  orders  placed  months 
ahead,  in  the  belief  that  there  will  be  a  shortage  or  a 
surplus  in  given  commodities.  South  America's  specu- 
lations are  based  on  distance  from  producing  centers. 
The  delay  in  the  arrival  of  a  ship  with  a  certain  com- 
modity may  cause  prices  to  soar,  and  the  unexpected 
arrival  of  a  ship  cause  the  corner  to  collapse  like  a  soap 
bubble.  Constructive  distribution  and  the  protection 
of  both  the  consumer  and  the  merchant  imply  stocks  of 
one's  goods  in  the  countries  where  markets  are  being 
built,  doing  away  with  the  basis  for  speculation. 

Packing  is  still  the  cause  of  much  complaint  in  ship-  ,'[ 
ments  of  our  goods  to  South  America.  Fully  ninety- 
five  per  cent  of  American  shipments  now  arrive  in  good 
condition.  The  shipment  that  arrives  undamaged  is 
seldom  heard  of — people  accept  it  as  a  matter  of  course, 
which  it  should  be.  The  other  five  per  cent  is  due  to 
the  amateur  packer,  who  has  no  knowledge  of  ocean 
transportation  or  export  conditions.  Instead  of  fitting 
the  shipment  to  Euenos  Aires  or  Valparaiso  with  a  new 
box,  of  stout  boards,  built  just  the  right  size,  he  prob- 
ably takes  an  old  packing  case,  half  as  large  again  as 
is  needed,  puts  the  goods  into  it,  and  fills  the  surplus 
space  with  trash.  The  case  is  not  strong  enough  and 
will  arrive  broken  nine  times   in   ten.     And  because 


138       BUSINESS  IN  SOUTH  AMEEICA 

dTitv  is  paid  on  weight,  tlae  consignee  will  be  charged 
ten  to  twenty-five  cents  a  pound  on  unnecessary  pack- 
ing material  and  boards. 

Pilfering  is  very  common  in  some  of  tbe  South 
American  countries.  Boxes  are  deftly  opened  in  transit 
and  valuable  goods  stolen.  These  thefts  seem  to  occur 
all  along  the  line — some  of  them  in  the  shipper's  own 
packing  room,  others  on  the  dock  in  New  York,  or 
while  being  carted  to  the  docks,  others  on  ships  at  sea, 
in  the  hold  of  the  ship  while  being  unloaded,  on  the 
lighter  or  docks  in  South  America,  and  even  in  South 
American  customs  houses.  Certain  precautions  can 
be  taken.  One  is  to  ^^fiscalize"  each  export  shipment 
in  the  shipper's  packing  room  by  checking  and  re^ 
checking  goods  so  that  it  is  certain  everything  is  packed 
in  the  box.  Another  is  to  use  not  merely  strong  new 
packing  cases,  but  a  type  specially  designed  to  be  thief- 
resisting.  A  Chilean  thief  was  induced  to  give  a  dem- 
onstration of  his  art.  He  offered  to  open  a  packing 
case  with  a  guard  leaning  against  it,  provided  nobody 
watched  him.  In  three  minutes  he  said,  "Now  you 
can  look."  The  case  was  apparently  intact.  But  he 
had  removed  a  dozen  boxes  of  valuable  goods.  His 
work  was  done  silently  with  wedges,  the  first  thin  as  a 
knife  edge,  the  next  a  little  larger,  and  so  on,  until  a 
board  had  been  lifted  high  enough  to  admit  his  hand. 

\  \  An  American  with  long  experience  in  South  American 
1  shipments  advises  the  use  of  double  packing  cases,  the 

'  S  inner  boards  running  straight,  the  outer  boards  diagon- 
ally. To  get  into  this  type  of  case  it  is  necessary  to  re- 
move all  the  diagonal  boards  from  one  side  before  an 


busi:n'ess  with  south  America  139 

inner  board  can  be  lifted.  Another  contrivance  is  to 
drive  staples  into  every  place  where  boards  join,  these 
staples  being  marked  with  the  business  concern's  ini- 
tial's, so  that  thieves  will  have  no  way  of  concealing 
tampering.  If  tampering  can  be  quickly  detected, 
thefts  are  decreased  by  checking  goods  as  they  pass 
from  hand  to  hand. 

Bad  packing  is  not  confined  to  crates  and  boxes,  but 
may  be  found  in  goods  spoiled  for  lack  of  a  suitable  in- 
dividual container.  For  exfempla,  a  popular  effervescent 
remedy  widely  sold  in  the  United  States  almost  inva- 
riably reaches  South  America  utterly  spoiled,  because  it 
is  put  up  in  a  wide  mouthed  bottle,  with  the  cork 
dipped  in  paraffin.  Passing  through  the  tropics,  damp- 
ness destroys  the  effervescent  quality.  Canned  goods 
and  other  products  packed  in  a  poor  quality  of  tinplate 
quickly  show  rust  and  spoilage — enamel  or  a  heavy 
coating  of  tin  is  indispensable  for  tropical  heat  and  the 
humidity  of  the  ocean.  At  home,  we  have  developed 
some  remarkable  packages — handy  containers  for  hold- 
ing and  using  things,  boxes  that  turn  into  display  racks 
on  the  merchant's  counter,  packages  that  carry  fruit  to 
markets  one  thousand  to  three  thousand  miles  away. 
But  our  climate  is  dry,  and  our  railroads  carry  things 
with  minimum  handling.  Once  goods  are  on  the  ocean 
they  must  withstand  heat  and  humidity,  and  a  trip 
from  !N'ew  York  to  Valparaiso  may  involve  a  half  dozen  / 
or  more  handlings  before  the  shipment  reaches  the 
consignee's  warehouse:  Into  the  ship  at  New  York; 
out  of  the  ship  at  Colon;  into  another  ship  for  Chile; 
into  a  lighter  at  Valparaiso;  onto  the  muelle;  from  the 


\ 


140       BUSIiSTESS  m  SOUTH  AMEEICA 

muelle  to  the  customs  bouse,  and  thence  to  the  pur- 
chaser's warehouse.  If  the  shipment  crosses  the  Isth- 
mus hj  rail  there  will  be  additional  handling. 
,  Trade-marks  give  considerable  trouble  in  South 
■  America,  because  the  laws  in  most  countries  permit 
<  any  one  to  register  them  without  proving  ownership. 
Usage  does  not  establish  ownership,  as  under  our  own 
laws.  Unscrupulous  persons  register  valuable  foreign 
trade-marks  as  a  speculation,  in  the  hope  of  selling 
their  rights  to  the  real  owner  should  he  undertake  to 
enter  that  market.  This  has  sometimes  been  done  to 
make  money,  and  again  to  forestall  competition.  One 
,  of  the  first  steps  in  planning  for  South  American  trade 
\  is  to  register  one's  trade-mark  in  the  different  coun- 
tries, and  to  register  company  names  and  every  possi- 
ble variation  thereof,  so  that  no  loopholes  may  be  left. 
For  example,  the  corporate  title  of  the  Economy  Lumin- 
ous Watch  Company,  registered  alone,  would  leave  op- 
portunities for  trader-mark  thieves  to  use  such  varia- 
tions as  ^'Economical  Watch"  and  "Illuminated 
Watch."  Trade-mark  registration  should  be  delegated 
to  experienced  patent  attorneys  in  the  different  coun- 
tries, as  they  are  familiar  with  local  regulations,  skill- 
ful and  safeguarding  against  infringements,  and  capa- 
ble of  making  the  accurate  translations  into  Spanish  or 
Portuguese.  The  International  Trade-Mark  Conven- 
tion is  in  effect  for  the  ten  countries  in  Central  America 
and  the  West  Indies,  which  maintain  a  trade-mark 
bureau  in  Havana.  With  ratification  by  Venezuela,  it 
is  expected  that  the  ten  South  American  countries  will 
have  a  similar  bureau  in  Rio  de  Janeiro. 


BUSmESS  WITH  SOUTH  AMERICA    141 

By  our  standards,  the  South  American  is  somewhat 
fastidious.  Erom  Spain  and  Portugal  he  has  inherited 
the  helief  that  manual  work  is  degi'ading.  If  he  hap- 
pens to  be  a  Spanish,  Portuguese  or  Italian  peasant,  he 
will  work  his  way  into  affluence,  and  his  children  look 
down  upon  manual  work  which  with  us  would  be  taken 
as  a  matter  of  course,  or  even  fun.  If  the  South  Amer- 
ican owns  a  motor  car,  driving  it  himself  is  a  distinct 
concession,  and  he  will  carry  a  chauffeur  to  do  all  the 
dirty  chores.  If  he  has  a  package,  a  flunky  carries  it 
for  him.  In  countries  still  impregnated  with  the  caste 
system  he  seems  to  be  afraid  of  doing  ami:hing  that  may 
lower  him  sociallv.  Sometimes  he  will  enter  trade, 
but  even  that  is  left  to  immigrants  in  certain  countries. 
When  the  energetic  American,  just  landed,  comes  in 
lugging  his  own  samples,  the  effect  is  shocking.  Our 
free  and  easy,  self-reliant  ways  require  a  little  modifi- 
cation, and  after  experience  the  Yankee  hires  a  porter 
to  carry  his  sample  case,  even  though  it  be  no  larger 
than  a  cigar  box. 

However,  this  attitude  is  changing.  An  American 
engineer  in  charge  of  a  South  American  contract  hired 
a  young  South  American  engineering  gi-aduate  as  his 
assistant.  When  an  American  engineer  goes  into  the 
field  he  is  not  afraid  to  handle  pick  and  shovel,  and 
carry  loads.  The  South  American  engineer  must  have 
peons  to  carry  his  transit,  his  target,  his  lunch  and 
water  bottle — to  him,  engineering  is  purely  intellectual. 
This  American  engineer  led  his  assistant  a  hard  life. 
Together  they  lugged  instruments  in  the  hot  sun, 
climbed   hills,   wriggled  through  jungle.      The   South 


142       BUSnSTESS  IN  SOUTH  AMERICA 

American  was  puzzled  at  first.  But  lie  liked  his  chief, 
and  when  the  philosophy  of  the  thing  became  clear, 
stuck  to  him  loyally.  That  experience  taught  him  so 
much  of  real  engineering  that  afterwards  he  secured  a 
very  fine  position  in  the  government  of  his  country. 

The  metric  system  is  in  universal  use  throughout 
Latin  America,  although  old  Spanish,  Portuguese  and 
local  terms  are  often  used  as  a  matter  of  habit.  In 
Uruguay,  as  an  instance,  land  is  measured  for  sale  by 
the  metric  system,  with  the  hectare  the  unit.  But  Uru- 
guayan country  people  still  discuss  land  in  terms  of  the 
Spanish  "vara,"  so  that  it  has  become  necessary  to  pro- 
hibit the  use  of  the  name.     To  comply  with  the  law, 

measurements   are   often   written   "v "    in   deeds. 

Pounds,  tons,  yards,  gallons,  bushels  and  similar  meas^ 
ures  puzzle  the  South  American,  especially  when  dif- 
ferences exist  between  those  used  in  Great  Britain  and 
the  United  States.  Concessions  must  be  made,  begin- 
ning with  the  marking  of  shipping  cases  with  metric 
equivalents,  and  extending  to  quantities  in  selling 
goods,  dimensions  and  descriptions  in  catalogues  and 
correspondence,  and  so  on.  The  metric  system  has 
great  importance  in  the  coming  material  development 
of  South  America,  because  railroads  will  be  extended, 
equipment  tend  toward  standardization,  and  the  Amer- 
ican manufacturer  who  prepares  to  work  in  metric  di- 
mensions will  naturally  have  selling  advantages  over 
competitors  who  do  not. 

Latin  American  names  often  puzzle  the  visitor.  With 
a  letter  of  introduction  addressed  to  "Senor  Don  Arturo 


BUSINESS  WITH  SOUTH  AMERICA    143 

Cortes  y  Pizairo/'  an  American  might  address  the 
recipient  as  ''Senor  Pizarro,"  especially  if  the  explana- 
tory '^y"  were  left  out,  as  it  very  often  is — it  is  Span- 
ish for  ^^and."  But  the  real  name  is  Cortes,  Pizarro 
being  his  mother's  name.  Spaniards  always  call  their 
great  contemporary  novelist  '^Blasco"  instead  of 
''Ibaiiez."  Both  Spanish  and  Portuguese  families  in 
South  America  use  these  double  names.  This  is  done 
partly  for  family  reasons,  the  family  being  a  great  in- 
stitution in  Latin  countries.  But  it  is  also  useful  for 
identification  in  countries  where  the  leading  families 
have  gro^vn  large,  and  confusion  would  otherwise  fol- 
low. There  might  be  two  dozen  men  named  Arturo 
Cortes  in  a  country  where  the  name  runs  back  to  a 
pioneer  ancestor,  but  when  the  mother's  name  is  added, 
perhaps  only  one  Arturo  Cortes  y  Pizarro.  Even  the 
baptismal  name  has  its  dignified  prefix  of  ^'Don"  in 
Spanish  ("Dom"  in  Portuguese),  and  ^'Senor"  (''Sen- 
hor"  in  Portuguese)  is  used  for  the  surname.  Thus  John 
Smith  would  be  addressed  as  Seiior  Don  John  Smith, 
or  Senor  Smith,  or  Don  John.  An  amusing  illustra- 
tion of  the  value  attached  to  these  terms  came  up  after 
the  organization  of  Montevideo's  Botary  Club.  Good 
fellowship  and  the  Rotary  spirit  broke  down  many  of 
the  Latin  formalities,  and  members  were  called  by  their 
first  names,  following  Rotary  custom  in  the  United 
States.  But  the  simple  Tom,  Dick  and  Harry  familiar 
with  us  were  invariably  Don  Tomas,  Don  Ricardito, 
Don  Enrique,  preserving  the  Latin  courtesies.  Per- 
sonal dignity  is  a  very  real  thing  with  the  Latins. 


144       BUSINESS  IN  SOUTH  AMERICA 

The  Yankee  on  the  Southern  continent  finds  himself 
without  a  national  appellative.  The  South  Americans 
insist,  like  the  Canadians,  that  they  are  Americans  too. 
To  say  that  one  comes  from  the  United  States  makes 
matters  clearer.  For  while  there  are  the  United  States 
of  Brazil  and  the  United  States  of  Mexico,  citizens  of 
those  countries  are  Brazilians  and  Mexicans.  There 
is  really  hut  one  ^'Estados  Unidos."  The  term  "Yan- 
kee" (Yanki  or  Yanqui)  is  used  to  designate  all  Amer- 
icans, irrespective  of  our  application  of  the  word  to 
New  Englanders  alone.  But  it  is  not  altogether  compli- 
mentary, hecause  "Yankee"  has  become  a  sort  of  poli- 
tical and  journalistic  bugaboo  to  frighten  South  Amer- 
icans. In  everyday  dealings,  the  South  American  calls 
the  Yankee  an  "American"  knowing  very  well  that, 
through  long  familiarity,  the  term  means  ourselves,  and 
that  he  has  fortunately  his  own  national  appellative  as 
an  Argentine,  Chileno,  Brasilero,  Peruano.  But  a 
curious  little  kink  is,  that  he  likes  the  Yankee  to  call 
himself,  not  "American"  but  to  say,  "I  am  a  North 
American." 

Many  rules  have  been  set  down  for  the  conduct  of 
trade  with  South  America.  These  are  widely  accept- 
able, and  it  pays  to  follow  them.  But  there  should  also 
be  a  broad  policy  and  spirit  behind  trade.  This  has 
been  so  well  expressed  by  another  writer  that  it  may  be 
quoted  with  two  or  three  slight  modifications  in  con- 
cluding this  chapter : 


BUSINESS  WITH  SOUTH  AMEKICA    145 

THIRTY  DON'TS  ABOUT  LATUsT  AMERICAN 

TRADE.i 

Don^t  think  that  all  Latin  American  countries  are 
alike — they  differ  as  night  from  day. 

Don't  think  that  all  the  republics  have  a  tropical 
climate — remember  that  latitude  and  altitude  make  a 
big  difference. 

Don't  forget  that  Latin  America  produces  all  the 
products  of  the  temperate   zone. 

Don't  judge  the  possibilities  of  Latin  America  by 
the  map — the  population  is  not  in  proportion  to  area. 

Don't  classify  Latin  Americans  as  savages — great 
numbers  of  the  people  are  highly  civilized  and  cul- 
tured. 

Don't  judge  buying  power  by  size — some  of  the 
smaller  republics  are  the  largest  buyers. 

Don't  enter  Latin  American  markets  blindly — you'll 
pay  dearly  for  carelessness  and  lack  of  a  definite  policy. 

Don't  delude  yourself  into  the  belief  that  your 
foreign  competitors  are  asleep — your  experience  will 
surprise  you. 

Don't  think  that  "anything  is  good  enough"  for  the 
Latin  Americans — you'll  find  that  idea  very  costly. 

Don't  neglect  to  learn  the  Latin  American's  view- 
point— always  put  yourself  in  his  place. 

Don't  depend  on  one  source  of  information  only — 
there  are  many  sources  available. 

*From  "Trading  with  Latin  America,"  by  Ernest  B.  Filsinger, 
published  by  Irving  National  Bank,  New  York. 


146       BUSINESS  m  SOUTH  AMEEICA 

Don't  fail  to  consult  specialists  in  foreign  trade  mat- 
ters — you'll  find  their  advice  valuable. 

Don't  stint  yourself  in  tools — an  investment  in  re- 
liable guides  and  books  on  export  is  a  wise  one. 

Don't  hesitate  to  spend  time  and  money  for  investi- 
gations— it  will  be  an  economy  in  the  long  run. 

Don't  think  your  export  business  will  run  itself — 
it  needs  a  head  and  fixed  responsibility. 

Don't  interfere  unnecessarily  with  the  routine  of 
your  export  department — if  you  do,  you  may  expect 
mistakes. 

Don't  engage  a  representative  just  because  he  can 
speak  Spanish — it  takes  something  besides  that  to  sell 
goods. 

Don't  gi'ant  agencies  without  considering  the  extent 
of  territory — it  takes  time  to  properly  work  territory. 

Don't  fail  to  be  explicit — your  customer  doesn't 
want  to  guess. 

Don't  neglect  to  quote  C.  I.  F.,  if  possible — -the  Latin 
American  appreciates  such  quotations. 

Don't  burden  the  dealer  with  involved  discounts — 
mate  them  simple  and  easily  understood. 

Don't  expect  a  man  to  know  your  language  when 
you  don't  know  his — use  Spanish  or  Portuguese. 

Don't  send  a  catalogue  in  English  to  a  Spanish 
speaking  country — consider  how  much  you  would  like 
one  in  Russian. 

Don't  send  your  catalogues  indiscriminately — ^make 
sure  that  every  one  gets  into  the  right  hands. 

Don't  overlook  the  training  of  export  salesmen — 
your  European  competitors  find  it  pays. 


BUSINESS  WITH  SOUTH  AMEEICA    147 

Don^t  fail  to  use  the  metric  system — most  Latin 
Americans  prefer  it  to  others. 

Don't  neglect  details — you'll  be  judged  by  the  way 
you  attend  to  them. 

Don't  forget  that  promptness  is  necessary — fines 
may  be  incurred  if  documents  are  delayed. 

Don't  be  afraid  of  politeness — the  Latin  American 
appreciates  courtesy. 

Don't  expect  miracles — it  takes  time  to  develop  an 
export  trade. 


CHAPTER    XI 

WHY  SOUTH  AMERICA  NEEDS  CONTINENTAL  METHODS 

South  America  is  a  continent. 

!N^orth  America  is  a  continent. 

Europe  is  a  continent — and  it  is  not. 

Much  of  South  America's  development  thus  far  has 
been  financed  and  directed  by  Europeans.  Europe  is 
a  continent  geographically,  but  otherwise  just  a  group 
of  separate  nations  comparable  with  our  states.  Each 
country  has  developed  internally  in  matters  like  rail- 
roads. The  long  haul,  the  big  freight  car,  the  freight 
rate  ingeniously  adjusted  to  trafiic,  the  refrigerator 
car,  free  freight  movements  between  the  different  coun- 
tries, and  other  characteristics  of  our  own  continental 
system  of  railroading — ^these  are  practically  unknown. 
Many  of  Europe's  railroads  are  military  first  of  all, 
with  differences  of  track  gauge  to  embarrass  enemies. 

The  result  of  applying  European  ideas  in  South 
America  is  quickly  seen  by  the  visiting  Yankee.  Con- 
tinental Brazil  has  twenty  thousand  miles  of  railroad, 
nearly  one  third  that  in  all  South  America,  but  it  is 
largely  a  fringe  of  toy  railroad  along  the  seaboard. 
After  a  few  well-built  systems  have  been  enumerated, 
the  rest  is  narrow  gauge,  poorly  located,  with  rolling 
stock  of  such  small  capacity  that  only  the  most  valu- 

148 


'KEEB  OF  COXTmElS^TAL  METHODS    149 

able  commodities  can  be  bauled,  like  coffee,  and  those 
at  high  rates,  and  often  unprofitablj. 

Argentina  is  smaller  but  also  continental,  being 
about  the  area  of  the  United  States  east  of  the  Missis- 
sippi. It  runs  north  and  south  in  latitude,  with  a  wide 
range  of  soil  and  climates — cotton  and  sugar  cane  in 
the  north,  rich  prairies  in  the  center,  cool  sheep  coun- 
try in  the  south,  deserts  awaiting  irrigation  in  the 
west,  and  minerals  in  the  eastern  slope  of  the  Andes. 
Argentina's  railroads  have  also  been  built  on  the  Eu- 
ropean plan,  and  are  run  by  railroaders  accustomed  to 
dense  population  in  compact  little  countries  where  traf- 
fic is  almost  on  a  suburban  basis.  With  the  eight-ton 
"goods  van"  it  is  not  possible  to  get  our  advantages  in 
low  freight  rates  on  distance  and  tonnage. 

Chile  and  Peru  are  the  only  other  countries,  besides 
TTruguay  and  Bolivia,  with  more  than  one  thousand 
miles  of  railroad.  Chile  has  the  continental  idea  more 
clearly  than  any  other  South  American  country,  largely 
because  a  3,000  miles  system  up  and  down  her  long 
sliver  of  territory  is  needed  for  military  protection. 
But  her  5,000-odd  miles  of  railroad  have  seven  differ- 
ent gauges.  Peru's  railroad  building  thus  far  has  been 
piecemeal  effort,  but  her  needs  are  all  for  new  lines 
on  the  continental  plan  to  open  up  her  rich  lands  east 
of  the  Andes,  and  get  their  products  cheaply  to  Pacific 
ports. 

The  need  for  the  continental  idea  is  even  more  ap- 
parent when  one  wipes  out  national  boundaries  and 
views  South  America  as  a  whole.  There  is  onlv  a 
single  railway  running  from  the  Atlantic  to  the  Pacific, 


k 


150       BUSINESS  m  SOUTH  AMEEICA 

connecting  Buenos  Aires  witli  Valparaiso,  and  that  lias 
three  different  gauges  and  involves  two  changes  of  cars. 
A  second  line  from  Buenos  Aires  up  through  Bolivia 
to  the  Pacific  ports  of  Arica,  Chile,  and  Mollendo, 
Peru,  with  connections  to  Cuzco,  and  ultimately  Lima, 
Peru,  is  being  completed  by  the  building  of  a  single 
stretch  of  very  difficult  construction  in  the  Bolivian 
Andes.  But  there  are  almost  no  railroads  running  be- 
yond the  boundaries  of  the  different  countries,  because 
each  has  suspected  its  neighbors  of  aggression. 

Our  railroading  for  fifty  years  has  been  continental. 
We  are  the  only  nation,  in  fact,  that  has  developed  a 
continent  with  railroads,  unless  it  be  Canada,  which  is 
practically  in  the  family  anyway.  Continental  rail- 
roading goes  further  than  the  mere  rails  from  ocean  to 
ocean.  It  means  hauling  things  about  in  fifty-ton  cars, 
1,000  to  3,000  miles,  with  special  service  like  refrigera- 
tion, and  terminals  equipped  with  cold  storage,  grain 
elevators  and  automatic  loading  and  unloading  devices. 

American  railroading  was  as  much  a  revelation  to 
the  Prench  as  American  fighting  during  our  participa- 
tion in  the  war.  We  left  large  American  freight  cars 
and  big  American  superheater  locomotives  there  after 
the  armistice.  Both  showed  such  economies  in  haul- 
ing that  the  old  ten-ton  Prench  freight  car  is  being 
replaced  with  box  cars  of  thirty  and  forty-ton  capacity. 
Our  long  trains,  with  frequent  and  adequate  passing 
tracks  at  stations;  our  gravity  tracks  and  other  freight 
yard  economies;  our  telegraph  and  telephone  train  dis- 
patching systems;  our  railroad  shop  equipment  for 
keeping  rolling  stock  in  service' — ^these  have  created 


4 


:NEED  of  CONTIKENTxVL  methods    151 

an  entliusiastic  new  school  in  French  railroad  design 
and  operation. 

We  haul  things  about  to  such  an  extent  that  the 
freight  bill  of  the  American  family  exceeds  one  hun- 
dred dollars  a  year,  an  item  that  would  shock  the  fni- 
gal  Frenchman  and  careful  Briton  who  have  been  build- 
ing and  operating  railroads  in  South  America. 

Thirty-odd  years  ago  the  idea  was  conceived  of  ship- 
ping California  oranges  to  our  Atlantic  seaboard  mar- 
kets. It  was  necessary  to  meet  the  competition  of 
Florida,  the  West  Indies,  and  even  Mediterranean 
countries.  A  complete  new  technique  had  to  be  worked 
out — refrigerator  cars,  icing  in  transit,  scientific  meth- 
ods of  picking,  gi-ading  and  packing  the  fniit.  To- 
day California's  shipments  of  citrous  fruits  exceed  one 
thousand  cars  weekly,  witn  tens  of  thousands  more  cars 
carrying  fresh  peaches,  apricots,  plums,  prunes,  pears, 
apples,  cantaloupes,  asparagus,  celery  and  other  out- 
of-season  soil  products  which  have  been  brought  within 
reach  of  almost  every  American  family.  Through  pre- 
cooling,  as  tender  a  product  as  the  red  raspberry  is 
shipped  from  the  Pacific  coast  to  Chicago. 

With  wonderful  facilities  for  gi'owing  all  these 
things,  and  others  not  suitod  to  even  California  or 
Florida,  South  America  has  practically  no  trade  at  all 
in  fresh  fruits  and  vegetables.  ISTo  export  trade,  no 
trade  between  different  countries,  and  not  even  a  healthy 
movement  between  provinces  of  the  same  country. 

Argentina  is  a  fair  example.  In  the  province  of  Men- 
doza,  corresponding  to  California,  it  is  possible  to  grow 
practically  everything  that  state  raises  and  ships,  and 


152       BUSINESS  IN  SOUTH  AMERICA 

in  tlie  province  of  Tucuman  the  winter  vegetables  upon 
w^hich  Florida  has  based  a  great  industry.  But  the 
transportation  equipment  and  technique  is  lacking — no 
refrigerator  cars,  no  trained  packers,  no  icing  facilities 
in  transit,  no  fast  schedule  trains  for  perishables.  As 
a  consequence,  fresh  fruit  and  winter  vegetables  are 
usually  beyond  the  means  of  the  average  family  in 
Buenos  Aires,  and  Argentina  presents  the  paradox  of 
being  an  importer  of  California's  canned  and  dried 
fruit,  and  even  of  American  apples  which  might  be 

1     raised  at  home. 

\.  Argentina  needs  continental  methods  in  expanding 
her  grain  exports — big  grain  cars  backed  by  elevators 
to  reduce  the  expense  and  waste  of  the  present  sack 
system.  She  needs  big  self-diimping  cars  to  carry  coal 
into  the  interior,  and  cement  and  road  building  material 
for  highways  across  her  plains,  where  even  the  stone 
and  gTavel  must  be  hauled  in  for  road  building. 

Brazil's  railroads  have  been  built  largely  on  a  sys- 
tem that  guarantees  the  European  investor  a  certain 
yearly  interest  upon  his  capital.  At  the  same  time,  the 
amount  of  capital  invested  per  kilometer  has  been  limit- 
ed. The  result  is  seen  in  narrow  gauge  railroads, 
cheaply  built,  inadequate  for  real  traffic,  charging  high 
freight  rates  and  still  earning  insufficient  revenue  for 
interest  charges,  which  must  come  out  of  the  national 
treasury.  Brazil  has  regarded  her  wonderful  rivers  a 
substitute  for  railroads  in  the  north,  but  American  ex- 
perience demonstrates  that  river  transportation  cannot 
compete  with  railroads  developed  on  the  continental 
plan.     When  Brazilian  resources  are  developed  on  this 


KEED  OF  CONTINENTAL  METHODS    153 

plan,  it  is  fairly  certain  that  many  of  the  products  of 
the  Amazon  country,  instead  of  going  down  that  river, 
will  be  taken  the  other  way  by  railroad,  out  the  back 
door,  to  ports  like  Bahia,  Kio  de  Janeiro,  Santos  and 
Porto  Allure. 

Chile's  position  on  the  long  Pacific  coastal  shelf,  with 
3,000  miles  of  ocean  on  one  side  and  the  barrier  of  the 
Andes  on  the  other,  might  seem  to  shut  her  off  from 
continental  transportation,  except  for  her  own  spinal 
column  railroad  system  which  stretches  nearly  from 
New  York  to  San  Francisco.  But  she  has  opportuni- 
ties to  carry  freight  and  passengers  for  her  neighlx)r3, 
enabling  them  to  use  her  many  ports,  as  well  as  the 
Panama  Canal.  On  the  south  she  can  serve  western 
Argentina,  and  on  the  north  Bolivia  and  even  western 
Brazil.  Chile  is  very  much  alive  to  these  possibilities. 
She  is  scrapping  lightweight  German  locomotives,  and 
replacing  them  with  American  locomotives  and  rolling 
stock,  and  ultimately  hopes  to  divert  products  of  Ar- 
gentina, Bolivia  and  Brazil  over  the  Andes  by  quot- 
ing attractive  freight  rates  based  on  the  economies  ef- 
fected by  big  cars,  long  trains  and  heavy  locomotives. 

So,  in  the  new  era  of  expansion  now  beginning  in\/ 
South  America,  there  are  opportunities  for  the  Amer/ 
ican  railroader,  transportation  engineer,  manufacturer 
of  locomotives,  rolling  stock  and  equipment^  as  well  as 
for  the  banker  and  investor.  South  America  needs  not 
merely  more  railroads  to  develop  her  resources,  but  a 
new  philosophy  of  transportation,  and  that  philosophy 
is  ours,  growing  out  of  experience  in  developing  a  con- 
tinent of  our  own. 


154       BUSmESS  IN  SOUTH  AMEKICA 

We  have  not  always  been  supremely  wise  in  financing 
and  building  our  own  railroads,  of  course.  Witness 
the  wanton  days  of  our  Wall  Street  railroad  wreckers. 
We  have  not  been  altogether  wise  in  our  own  genera- 
tion— as  is  seen  in  the  regulation  and  starvation  of  our 
railroads  and  their  present  inadequacy  for  the  traffic 
of  the  nation.  Therefore,  criticism  of  South  American 
railroad  development  implies  reservations. 

One  thing  we  may  point  to  with  satisfaction — the 
ability  of  our  railroaders  and  the  efficiency  of  their 
big-scale  methods.  Most  of  our  trouble  has  come,  not 
from  them,  but  from  the  crooked  financiers  and  looters. 

In  South  America,  on  the  contrary,  while  some  offi- 
cial graft  may  have  accompanied  railroad  building,  the 
looter  has  not  been  a  factor.  Much  of  the  trouble  has 
arisen  from  the  South  Americans'  lack  of  training  and 
experience  in  technical  matters. 

This  is  a  shortcoming  which  will  be  remedied  during 
the  next  ten  or  twenty  years,  by  sending  the  young 
men  of  the  Southern  republics  to  the  technical  schools 
of  the  United  States  and  England.  But  it  is  still  a 
characteristic  to  be  taken  into  account  in  doing  busi- 
ness with  the  South  Americans. 

In  Latin  America  nothing  strikes  the  Yankee  so 
quickly  as  this  general  lack  of  mechanical  sense.  There 
is  an  old  engineering  saying:  "When  you  sell  a  ma- 
chine to  the  Latin  American,  in  three  months  one  of 
two  things  has  happened — the  Latin  American  has 
broken  the  machine,  or  the  machine  has  killed  the  Latin 
American." 

If  one  of  our  machines  breaks  down  we  fix  it  or  send 


KEED  OF  CONTINENTAL  METHODS    155 

for  the  repair  man.  But  the  Latin  American  decorates 
it  with  a  sign,  ^'No  Funciona,"  and  goes  away  and 
leaves  it.  All  over  the  Southern  continent  one  sees  this 
sign.  ^^No  Funciona"  is  a  far  better  alibi  than 
^^mafiana."  A  further  touch  of  artlessness  is  added 
w^hen  the  sign  on  a  broken-down  lift  reads  '^Malo," 
which  means  ^'bad." 

Even  when  machinery  runs,  it  is  usually  on  three 
legs.  Automobiles  thump  and  wheeze,  their  wheels 
w^obble,  and  they  just  barely  get  over  moderate  hills, 
though  they  may  be  high-powered  American  cars  capa- 
ble of  "eating  up  mountains."  Type^vriters  and  adding 
machines  soon  become  so  temperamental  that  they  can 
be  operated  only  by  the  person  who  has  seen  all  their 
idiosyncrasies  develop.  From  railroad  locomotives 
right  down  to  push  buttons  and  locks,  mechanical  ap- 
paratus goes  crazy  in  Latin  America,  and  people 
humor  it  patiently  in  the  belief  that  it  is  incurable. 

Many  Americans  jump  to  the  conclusion  that  the 
people  of  the  Southern  continent  are  naturally  non- 
mechanical — that  it  is  useless  to  expect  them  to  under- 
stand machinerv.  But  that  is  a  mistake.  The  Latin 
American  is  decidedly  clever  at  the  handicrafts  he  fol- 
lows, doing  superior  work  in  wooH,  brick,  stone,  plaster, 
leather  and  other  materials.  He  happens  to  be  non- 
mechanical  to-day  largely  because  he  has  enjoyed  few 
contacts  with  machine  civilization.  He  makes  an  apt 
pupil,  and  to-morrow,  with  better  opportunities,  may 
easily  set  us  a  pace. 

In  selling  to  Latin  America  we  have,  in  this  matter, 
both  an  opportunity  and  a  duty.     Too  often  we  have 


166       BUSmESS  m  SOUTH  AMERICA 

sent  the  salesman  where  the  demonstrator  and  the  serv- 
ice man  were  really  needed. 

American  elevators  were  installed  in  a  new  hotel  on 
the  Southern  continent.  Then  the  building  stood  idle 
five  years  waiting  for  a  lessee.  When  it  was  finally 
opened  the  elevators  were  out  of  commission  half  the 
time,  and  the  "l^o  Funciona"  sign  became  almost  part 
of  the  equipment.  The  management  could  not  see  why 
machinery  should  deteriorate  when  it  wasn't  being  used 
at  all.  Those  elevators  were  sold  through  a  big  im- 
porting house  which  is  the  only  representative  of  the 
American  manufacturers  in  that  country,  and  repre- 
sentation has  never  extended  to  the  manufacturers' 
mechanical  department.  Along  with  our  elevators  Latin 
America  ought  to  have  our  upkeep  and  mechanical  train- 
ing, of  course,  and  it  needs  our  elevator  insurance  and 
inspection,  something  that  seems  to  be  entirely  im- 
known. 

Automobile  tires  are  another  illustration.  Practi- 
cally all  of  them  have  come  from  the  United  States 
since  the  war.  ISTothing  gives  better  value  for  intelli- 
gent upkeep  than  an  automobile  tire.  But  not  one  tire 
in  twenty  throughout  Latin  America  is  given  the  sim- 
ple upkeep  of  proper  inflation.  Forty  to  fifty  pounds 
pressure  is  common  on  big  tires  that  need  eighty,  and 
mileage  is  burnt  up  uselessly.  Our  tire  manufacturers 
have  established  their  own  sales  branches  in  many 
places,  but  there  is  a  job  of  education  as  well  as  selling 
ahead  of  them.  If  they  will  understand  that  Latin 
America  needs  teaching,  and  is  also  teachable,  mileage 
and  service  can  undoubtedly  be  made  the  basis  for 


IS^EED  OF  CONTINENTAL  METHODS    157 

holding  much  of  the  tire  business  that  we  came  into  so 
suddenly  when  European  products  were  cut  off. 

Latin  America  is  not  only  teachable  in  mechanical 
matters,  but  has  a  new  determination  to  leani.  Every- 
where one  finds  the  desire  for  industries,  and  the  sub- 
stitution of  machinery  and  large  scale  production  for 
the  primitive  agriculture  of  the  Southern  countries. 
To-day  the  lusty  peasant  and  Indian  whack  the  soil 
with  ponderous  hoes  and  cultivate  crops  with  the 
machete.  To-morrow  they  will  be  using  tractors  and 
gang  plows.  Shortage  of  labor  and  area  of  country  r 
make  modern  methods  necessary,  for  Latin  Americanyy 
conditions  are  much  like  our  own. 

Intent  mostly  on  selling,  and  often  through  agents 
who  are  chiefiy  traders,  our  farm  implement  manufac- 
turers have  failed  to  study  agricultural  conditions  in 
the  different  countries,  and  adapt  equipment  to  their 
special  requirements. 

In  Peru,  for  example,  cotton  is  not  planted  each 
season,  as  with  us,  but  left  standing  in  the  fields,  bear- 
ing for  six  or  seven  years.  The  rows  are  widely  spaced 
— 1.3  meters,  or  more  than  four  feet.  The  cotton  belt 
now  under  cultivation  is  all  irrigated  land.  It  needs 
vigorous  cultivation  because  the  surface  hardens.  No 
cultivator  designed  to  work  two  rows  at  once,  with 
either  horses  or  tractor,  and  high  enough  to  clear  the 
plants,  has  yet  been  placed  on  the  market.  American 
manufacturers  simply  offer  the  Peruvian  planter  im- 
plements designed  for  our  own  farming  conditions. 

Many  other  American  products  require  similar  adap- 


158       BUSIJSTESS  m  SOUTH  AMEEICA 

tation  to  Latin  American  conditions,  and  a  certain 
amount  of  "foolproofing." 

We  build  apparatus  for  speed,  operate  it  with  con- 
stant upkeep,  and  send  it  to  the  scrap-heap  when  some- 
thing faster  or  cheaper  is  invented.  Spare  parts  and 
repair  men  are  just  around  the  comer. 

Europe  has  had  a  different  philosophy — to  make  ap- 
paratus extremely  durable,  and  run  it  until  it  wears 
out,  which  may  be  years  hence.  An  old  machine,  like 
an  old  employee,  will  be  retained  in  a  European  plant, 
and  valued  for  its  years  of  faithful  service. 

Now,  in  a  Latin  American  country,  where  good  re- 
pair men  are  not  plentiful,  and  spare  parts  are  from 
six  weeks  to  six  months  away,  the  sturdy  apparatus  is 
usually  best.  The  British  learned  this  long  ago,  and 
built  exceptional  strength  and  ruggedness  into  their 
export  apparatus,  where  we  specialize  in  ingenuity  and 
adaptability.  So  their  stuff  stands  up  under  work,  and 
even  abuse,  and  many  Americans  abroad  often  prefer 
it  to  our  own. 

A  practical  method  of  teaching,  available  to  many 
American  concerns  whose  goods  have  secured  a  wide 
distribution  in  Latin  America  during  the  war,  is 
through  the  printed  word. 

It  is  interesting  to  inspect  our  merchandise  and  ap- 
paratus on  the  Southern  continent,  and  see  what  litera- 
ture the  manufacturers  have  sent  out  with  it.  and  what 
they  have  to  say  for  themselves.  Many  products  are 
now  specially  packed,  with  Spanish  or  Portuguese  la- 
bels, circulars,  directions,  supplementary  infoiTQation 
about  other  articles.   Others  send  out  the  standard  pack 


JSTEED  OF  CONTmENTAL  METHODS    159 

distributed  at  home,  witli  abundant  talk  about  the 
quality  in — pure  American  !  Some  manufacturers  have 
visualized  the  possibilities  to  the  extent  of  fitting  ap- 
paratus with  name  and  direction  plate  in  the  other  fel- 
low's language,  but  all  through  the  Southern  countries 
one  sees  directions  to  ^Tull/'  'Turn/'  "Oil  here/'  and 
the  like,  and  on  British  apparatus  as  well  as  our  own. 
When  things  refuse  to  function  in  Latin  America  it 
is  for  lack  of  mechanical  knowledge  rather  than  any 
lack  of  intelligence  or  interest  in  mechanical  things. 
The  Latin  American  cousin,  more  and  more,  is  drop- 
ping poetry  to  take  up  engineering,  and  turning  from 
Europe  to  us  for  practical  things.  So  we  have  a  job 
of  teaching  as  well  as  selling. 


\ 


CHAPTER   XII 


THE  OTHER  FELLOW— OUR  COMPETITOR 


A  big  battlesliip  dropped  anchor  in  a  South  American 
harbor.  It  belonged  to  a  European  nation  with  trade 
and  investments  in  that  country,  and  had  been  sent  on 
a  tour  of  the  continent  to  create  friendship  and  good- 
will. Largely  for  commercial  purposes,  this  being  the 
diplomatic  conception  of  an  advertising  campaign. 

There  was  a  week  of  receptions,  dinners  and  enter- 
tainments abroad  and  on  shore.  During  that  week 
rumors  flew  fast  around  the  American  colony,  the 
British  colony  and  other  commercial  suburbs  of  indus- 
trial nations  planted  in  that  capital. 

^'Did  you  hear?"  whispered  a  vice-consul's  wife. 
"Tlie  Captain  of  the  battleship  called  on  the  Minister 
of  Foreign  Affairs,  but  not  the  Third  Assistant  Dog- 
Catcher  General." 

"Worse  than  that,"  whispered  a  Military  Attache, 
"the  Jefe  de  Bomberos  did  not  attend  the  reception  on 
board  the  other  night  because  his  sister-in-law  was  not 
invited." 

"N'ow  they  will  lose  trade  in  this  country,"  solemnly 
predicts  an  embassy  assistant.  "These  people  are  so 
sensitive,  you  know.     Isn't  it  awful !" 

Yes — terrible,  if  trade  were  done  that  way! 

160 


THE  OTHER  FELLOW  161 

Observe  that  all  these  good  people,  shivering  de- 
lightedly at  the  prospect  of  a  rival  nation  losing  trade, 
or  afraid  that  battleship  advertising  may  bring  results, 
are  not  in  trade  themselves,  but  honest  government 
workers,  living  in  a  queer  little  world  of  formality  and 
rumor.  The  people  who  sell  goods  in  that  country,  and 
those  who  buy  goods,  are  pretty  much  left  out  of  the 
receptions  and  dinners. 

The  idea  that  trade  follows  the  flag  is  mischievous 
and  illusorv. 

A  business  transaction  in  the  United  States  may 
involve  a  Yankee,  a  Scotchman,  a  Jew,  an  Irishman, 
an  Englishman  and  a  German.  Xobody  thinks  for  a 
moment  of  nationalities.  Individuality  is  what  counts, 
and  ability,  and  honesty,  and  the  price  and  quality  of 
the  goods,  the  reputation  of  a  business  house,  the 
service  it  gives. 

But  transfer  the  same  deal  to  Rio  de  Janeiro,  and 
people  begin  thinking  of  nationalities,  watching  it  on 
that  basis  from  start  to  finish,  putting  it  into  statistics 
as  so  much  British  trade,  or  American  exports,  or 
whatnot. 

Despite  the  statistics,  however,  business  is  done 
abroad  on  pretty  much  the  same  lines  of  individuality, 
ability,  service.  Gonzales  may  use  nationality  when 
he  drives  a  bargain  in  Lima,  pitting  the  Briton  against 
the  Yankee,  the  German  against  the  Italian.  But 
when  he  gives  his  orders  he  is  guided  by  the  ability  of 
the  seller  to  deliver,  the  credit  terms,  the  prevailing 
rate  of  exchange.  The  order  may  go  to  Xew  York 
because  British  goods  are  unobtainable.     Or  it  may  go 


162       BUSmESS  m  SOUTH  AMEEICA 

to  Mancliester  because  the  pound  sterling  is  down  and 
the  dollar  rising.  Gonzales  may  be  a  Peruvian,  a 
Spaniard,  an  Italian,  a  German.  Ear  from  swinging 
the  order  to  his  own  nation,  he  will  be  suspicious  of 
appeals  made  to  him  on  a  basis  of  loyalty  to  his  own 
country.  "Those  fellows  are  trying  to  stick  me,"  he 
reasons.  "If  they  want  the  business,  let  them  work 
for  it  like  the  British  and  the  Yankees." 

During  the  war  American  manufacturers  occupied 
a  unique  position  in  South  America — a  position  with- 
out precedent.  Goods  from  Europe  were  obtainable  in 
very  small  quantities,  if  at  all.  We  were  swamped 
with  orders  from  South  Americans,  who  would  take 
anything  at  all,  and  be  glad  to  get  it,  and  cable  cash 
to  E'ew  York  to  pay  for  merchandise.  Mushroom 
export  houses  sprang  up  in  the  United  States.  Volume 
grew  so  large  that  American  manufacturers  sent  sales- 
men to  the  Southern  continent  and  opened  branches. 
A  year  passed,  two  years,  three  years,  and  still  the 
demand  was  overwhelming.  Yankee  goods  monopo- 
lized the  wholesaler's  warehouse  and  the  retailer's 
shelves  all  over  Latin  America.  Prices  were  high, 
profits  big.  The  conservative  British  railway  man- 
ager, operating  South  American  railways  built  with 
British  capital,  who  had  always  bought  equipment  at 
home,  was  glad  to  get  rationed  allotments  from  the 
United  States.  The  German  importer  who  had  stuck 
to  goods  from  the  Eatherland,  before  the  war,  camou- 
flaged himself  as  a  Dutchman  or  a  Swiss  and  took 
care  of  his  trade  with  Yankee  goods. 

GKven   such  a  situation,  naturally    Americans  dug 


THE  OTHER  FELLOW  163 

themselves  into  the  trade,  and,  like  the  popular  beauty 
at  the  ball,  forgot  all  about  rivalry  and  competition. 
When  the  ai'mistice  came,  and  the  prospect  of  South 
America  resuming  trade  with  England,  the  Continent, 
and  even  Germany,  they  resented  any  suggestion  that 
competitors  would  "come  back."  To  point  out  the 
solidity  of  British,  Continental  or  German  trade  con- 
nections in  South  America,  or  to  suggest  that  from 
fifty  to  seventy-five  per  cent  of  our  abnormal  war  trade 
might  be  lost  when  the  world  became  normal  was  to 
bring  down  upon  one's  head  the  abuse  of  Americans 
who  had  profited  by  the  abnormal  conditions. 

But  facts  are  facts,  and  facts  began  to  govern 
conditions  during  the  first  year  after  the  armistice. 

The  German  importer  in  Argentina  sold  Yankee 
goods  during  the  war  to  keep  his  business  going.  On 
the  very  day  the  peace  terms  were  signed  Gennan 
salesmen  visited  him  with  samples — 191-i  samples,  to 
be  sure,  but  they  also  quoted  191-i  prices.  For  several 
weeks  the  importer  withheld  new  orders  from  Yan- 
kee salesmen.  Then  he  doubted  the  ability  of  Ger- 
man houses  to  fill  orders,  and,  acting  on  the  facts, 
bought  more  goods  in  the  United  States.  Had  British 
or  French  goods  alone  been  obtainable  he  would  have 
bought  them,  for  patriotism  is  one  thing,  and  bread 
and  butter  another. 

The  war  peg  was  pulled  out  from  beneath  the  British 
pound.  Down  it  went  to  4.50—4.20—4.00—3.50. 
The  Yankee  dollar  rose  coiTespondingly.  "Hurray — 
our  dollar  is  the  best  monev  in  the  world!"  exulted 
Wall    Street    and    Washington.     But   presently    it    is 


Ml 


164       BUSmESS  IN  SOUTH  AMERICA 

found  that  merchants  in  world  markets  buy  goods,  not 
with  the  best  money  in  the  world,  but  the  cheapest 
^  money  they  can  get,  other  factors  being  fairly  equal. 
Simply  on  exchange.  South  American  orders  go  to 
England  and  the  Continent  instead  of  the  United 
States.  Pacts — not  foreseen  by  the  Yankee,  who  in- 
sists that  the  trade  belongs  to  us  because  we  "took 
care  of  it"  during  the  war. 

World  trade  being  viewed  through  the  spectacles  of 
nationality,  there  is  always  a  good  deal  of  feeling  and 
prejudice  on  the  subject.  But  neither  feeling  nor 
prejudice  alters  the  facts.  If  some  detached  person  like 
a  journalist  or  a  trade  investigator  comes  along  and 
states  the  facts,  the  self-interested  salesman  and  branch 
manager  may  become  very  angry,  yet  the  facts  remain. 

The  nation  which  led  in  sales  to  South  America  be- 
fore the  war,  and  whose  trade  was  largely  taken  over 
by  ourselves,  was  Great  Britain.  In  the  readjustment 
following  peace,  the  Yankee  natui-ally  regarded  John 
Bull  as  his  chief  competitor,  while  the  Britisher,  feel- 
ing that  he  had  been  supplanted,  was  most  apprehen- 
sive about  Yankee  competition.  As  a  matter  of  ab- 
stract friendship  between  the  two  nations,  Americans 
would  surely  like  to  see  John  Bull  regain  his  markets 
in  South  America.  Indeed,  from  a  broad  business 
standpoint,  to  regain  his  markets  means  better  business 
for  us  in  British  ability  to  buy  our  products  and  pay 
back  the  money  we  have  loaned.  But  in  the  heat  of 
competitive  selling,  right  on  the  ground  in  South 
America,  mth  salesmen  and  banks  pitted  against  each 
other,  feeling  takes  lines  of  nationality,  and  becomes 


THE  OTHER  FELLOW  165 

bitter.     Hard  words  are  bandied  about  in  the  form  of 
propaganda. 

British  strength  in  South  American  markets  is  not 
a  matter  of  nationality  or  sentiment.  It  rests 
upon  reputation,  connections,  investments  and  being 
Johnnj-Bull-on-the-spot.  One  of  the  great  advantages 
to  British  trade  throughout  the  world  is  the  large 
colonies  of  British  merchants  actually  living  in  foreign  i 
countries,  many  of  them  being  of  the  third  and  fourth  / 
generation. 

John  Bull  got  into  South  American  trade  as  soon 
as  Spain's  blind  monopoly  was  broken  by  San  Martin 
and  his  Argentino  patriots.  There  was  some  thought 
of  seizing  Spain's  colonies  during  the  Independence 
struggle,  and  a  British  military  expedition  attempted 
it  in  Argentina  and  Uruguay,  but  was  defeated.' 
The  British  then  gave  up  their  ideas  of  military  con- 
quest, and  helped  the  South  Americans  gain  their  inde- 
pendence. Individual  Britons  fought  in  Argentina, 
Chile  and  Peru,  where  British  names  are  common,  a 
cherished  legacy  from  patriot  fathers  who  married 
into  the  countries  for  which  they  fought.  Bolivar  had 
a  distinct  British  legion  in  his  army. 

The  British  trader  followed  closely  on  the  British 
freelance  warrior.     It  was  part  of  British  policy  dur- 

*  Better  than  any  other  book  in  English,  "The  Purple  Land" 
by  W.  H.  Hudson,  gives  the  gaucho  flavor  of  the  pampas.  The 
original  title  of  this  narrative  was  ' '  The  Purple  Land  That  Eng- 
land Lost, ' '  and  in  a  preface  to  a  new  edition,  when  its  merit 
was  recognized  after  years  of  oblivion,  the  author  shows  how  both 
Uruguay  and  Argentina  might  have  been  British  colonies  with  a 
little  more  determination  on  the  part  of  British  generals  sent 
to  capture  them  a  hundred-odd  years  ago. 


166       BUSmESS  IN  SOUTH  AMEEICA 

ing  the  Napoleonic  wars  to  establisli  South  American 
trade.  As  the  various  countries  became  tranquil 
politically,  British  money  was  invested  in  their  de- 
velopment. With  British  investments  went  British 
management  of  railroads,  public  utilities,  ports  and  like 
improvements,  and  British  loans  to  the  South  Ameri- 
can governments  brought  orders  for  British  equipment 
and  materials. 

John  Bull  has  often  worked  like  a  lion  for  South 
American  countries,  providing  them  with  markets  in 
ingenious  ways.  As  an  example,  back  in  the  seventies 
English  factories  began  to  turn  Uruguayan  cattle  into 
beef  extract.  Uruguay  was  then  torn  by  revolutions. 
It  is  possible  to  show  a  definite  decrease  in  the  little 
Eepublic's  political  disturbances  as  the  beef  extract 
industry  grew,  providing  a  market  for  cattle  instead 
of  hides  alone.  American  packers  are  now  help- 
ing Paraguay  into  prosperity  along  the  same  lines, 
utilizing  its  cattle  for  canned  corned  beef. 

John  Bull  has  reputation  and  acquaintance  in  South 
America.  He  has  a  strong  banking  organization,  and 
the  advantage  of  London  as  the  world's  financial,  trad- 
ing and  shipping  center. 

The  first  British  salesmen  who  reached  Peru,  more 
than  a  year  after  the  armistice,  came  over  from  the 
East  Coast  after  selling  all  the  goods  that  could  be 
allotted  to  South  America.  They  came  to  renew 
friendships.  Their  reception  was  almost  emotional. 
Peruvian  merchants  entertained  them  in  their  homes, 
called  at  their  hotel  to  see  samples,  and  pleaded  for 
the  privilege  of  placing  orders,  no  matter  how  small 


THE  OTHER  FELLOW  167 

tlie  quantities  obtainable,  nor  bow  distant  tbe  delivery. 

To  underestimate  Jobn  Bull's  business  skill,  and 
assume  that  be  is  'Mone  for,''  is  simply  to  fool  one's 
self.  In  world  trade  be  is  an  older  band  tban  our- 
selves, and  backed  by  better  organization. 

An  excellent  illustration  of  this  was  tbe  action  of 
tbe  London  banks  during  tbe  first  year  and  a  balf  of 
peace.  It  was  necessary  for  somebody  to  finance 
Europe,  on  tbe  verge  of  bankruptcy  and  starvation. 
Our  statesmen  and  bankers  talked  a  good  deal  about 
tbat  necessity,  but  did  very  little.  Tbe  London  banks 
made  tbe  pound  sterling  a  Imedium  tbrougb  wbicb  Con- 
tinental countries  could  purchase  materials  and  food 
from  tbe  United  States,  temporarily  forestalling  com- 
plete demoralization  in  tbeir  own  currencies.  Tbe 
pound  sterling  dropped  to  two  thirds  of  its  normal 
value,  but  that  diverted  orders  for  goods  in  markets 
like  South  America  from  iSTew  York  to  London,  so 
there  was  a  benefit  as  well  as  a  loss.  When  the  Conti- 
nental countries  bad  bad  time  to  adjust  their  finances, 
London  shifted  the  burden,  and  the  pound  sterling 
began  to  rise  in  value.  Skillful  international  manage- 
ment of  this  sort  indicates  Jobn  Bull's  ability  to  hold 
bis  own,  and  mere  competitive  feeling  does  not  enter 
into  the  equation  at  all. 

John  Bull  has  an  advantage  in  tbe  great  London 
market  for  bills  of  exchange  by  which  world  trade  is 
financed.  While  the  Britisb  government  was  paying 
five  per  cent  for  loans  during  tbe  war,  Britisb  export 
trade  was  financed  by  London  bankers  at  three  and  a 
balf  per  cent.     Our  Federal  Reserve  banking  system 


168       BUSmESS  m  SOUTH  AMEEICA 

was  devised  for  this  same  purpose,  to  create  a  market 
for  bills  of  exchange,  furnishing  capital  for  business 
abroad  as  well  as  at  home.  But  Federal  Keserve  man- 
agement has  been  criticized  on  the  score  of  neglect  of 
our  trade  abroad.  While  the  British  pound  was  at  its 
lowest  level  during  1919-1920,  London  bankers  with  an 
eye  on  to-morrow  maintained  the  lowest  possible  inter- 
est rates  on  commercial  paper  covering  British  exports, 
whereas  American  foreign  trade  acceptances,  covered 
by  Federal  Beserve  interest  rates,  were  charged 
several  per  cent  higher.  This  imposed  handicaps  on 
the  smaller  American  manufacturers  and  exporters 
who  had  built  up  business  abroad  during  the  war. 
They  were  unable  to  compete  with  London  terms. 
They  could  not  finance  foreign  customers  themselves. 
The  general  result  was  to  check  sales  abroad  by  such 
concems,  and  favor  big  American  corporations  with 
ample  financial  resources.  Likewise,  most  of  the 
capital  available  for  trade  acceptances  was  concen- 
trated upon  imports  at  the  expense  of  exports,  because 
eager  sellers  of  raw  material  in  other  countries  were 
willing  to  pay  the  Federal  Beserve  interest  rate. 

Another  indication  of  British  strength  is  the  fact 
that  something  like  15,000  British  volunteers  went 
from  that  continent  to  the  Western  Front,  7,000  of 
them  from  the  River  Plata  region,  chiefly  Buenos 
Aires,  which  latter  contingent  probably  outnumbers  all 
the  Americans  on  the  Southern  continent. 

War  brought  John  Bull  certain  business  advantages. 
It  pulled  the  British  Empire  together,  and  came  nearer 
"selling''  it  to  the  British  themselves  than  anything 


THE  OTHER  FELLOW  169 

that  has  happened  to  them  for  generations.  Before 
the  war,  the  Australian  and  Canadian  arriving  in  Lon- 
don, their  hearts  filled  with  sentiment  for  the  Mother- 
land, found  that  home-stajing  Britons  did  not  distin- 
guish between  Australians,  Anglo-Indians,  Canadi- 
ans, or  South  Africans.  They  were  all  ''Colonials,  you 
know,  part  of  the  Empire — but  not  exactly  like  usl" 
The  Yankee  was  better  understood,  because  better 
advertised.  War  abundantly  advertised  the  British 
colonies,  and  if  John  Bull  ever  views  them  as  unde- 
veloped markets,  his  colonial  demand  may  rival  our 
own  consuming  demand  in  purchasing  power.  For 
lack  of  such  a  viewpoint,  one  finds  the  paradox  of 
American  automobiles  monopolizing  the  market  in 
British  colonies  like  the  West  Indies,  where  British 
cars  are  few,  and  their  owners  must  run  them  without 
repair  parts  or  service. 

To  the  Yankee  in  South  America  certain  things 
happen  which  may  be  interpreted  as  British  prejudice 
against  ourselves.  Sometimes  it  is  discrimination  in 
rates  over  British  cables  to  JSTew  York  as  against  Lon- 
don. A  determined  effort  was  made  to  prevent  the 
extension  of  American  cable  to  Brazil,  where  the 
British  long  had  a  monopoly.  British  steamships, 
banks  and  distributors  discriminate  by  the  very  prac- 
tical method  of  charging  Yankees  all  the  traffic  \\all 
bear.  But  such  practices  should  not  be  attributed  to 
national  feeling.  They  are  the  shortsighted  actions  of 
corporations  and  individuals,  taking  advantage  of 
monopolies,  and  demonstrate  the  wisdom  of  acquiring 
facilities  of  our  own. 


170       BUSmESS  IN"  SOUTH  AMEEICA 

Jolin  BulFs  philosophy  of  business  differs  from  ours. 
He  regards  business  more  or  less  as  a  fixed  volume. 
He  works  for  a  snug  little  monopoly,  cherishes  his 
business  secrets,  has  his  depressions  and  fears.  He 
complains  about  the  bad  state  of  trade,  and  demon- 
strates that  it  is  impossible  to  make  money  in  his  line, 
and  all  the  time  is  probably  making  plenty  of  money 
in  the  side  issues  of  that  unfortunate  line.  While  he 
is  getting  rich,  he  will  make  you  think  he  is  going 
broke. 

Our  philosophy  regards  business  as  something  to  be 
expanded  indefinitely  by  creative  work.  As  soon  as  a 
monopoly  is  effected  we  start  an  independent  effort. 
Our  business  secrets  are  pooled.  If  we  make  money 
this  year  the  figures  are  published,  and  we  set  out  to 
beat  them  next  year. 

Our  philosophy  applied  to  British  business  would 
make  it  grow  in  England  itself,  much  less  the  Empire 
and  foreign  markets.  The  British  trait  of  dogged 
persistence,  on  the  other  hand,  would  stiffen  policy  in 
many  an  American  world  trade  enterprise.  If  the  two 
nations  can  learn  from  each  other,  and  supplant  rivalry 
with  teamwork  during  the  coming  period  of  South 
American  expansion,  the  new  business  created  by  each 
should  make  the  old  aggregates  for  both  look  insignifi- 
cant. 

South  American  trade  is  not  fixed  in  volume,  nor 
divided  on  lines  of  nationality.  Yet  each  nation  has  a 
fixed  volume  of  it  which  cannot  be  taken  away  by  com- 
petitors. This  volume  comprises  the  sales  of  products 
characteristic  of  each  country.     It  is  not  likely  that 


THE  OTHEK  FELLOW  171 

British  manufacturers  will  ever  compete  in  American 
devices  like  typewriters,  while  no  American  woolen 
mill  cares  to  turn  from  production  of  suitings  for  our 
enoi-mous  cutting-up  industry  to  supply  custom  tailors 
in  other  countries  with  the  small  lots  of  many  patterns 
which  they  get  from  England  Leeds  and  Batley  sup- 
ply many  custom  tailors  in  the  United  States,  just  as 
]^ew  England  supplies  typewriters  to  old  England. 

"Gro^vth"  is  the  word  in  South  America,  not  ''rivalry'' 
or  "nationality.''  An  era  of  expansion  is  beginning. 
The  new  business  will  be  the  important  thing — not  the 
business  one  can  take,  but  what  he  can  make. 

Germany  was  third  in  South  American  business  at 
the  beginning  of  the  war,  and  it  is  inconceivable  that 
she  should  not  ultimately  "come  back"  there.  She  had 
an  ideal  system  of  marketing,  with  personal  contacts, 
service  and  liberal  credits  at  the  Latin  American  cus- 
tomer's end,  and  an  organization  at  home  that  made 
whatever  the  customer  wanted,  no  matter  how  peculiar, 
or  how  trifling  the  quantity,  and  shipped  it  so  that 
freight,  customs  duty  and  other  expenses  were  ingeni- 
ously kept  down  to  the  minimum.  She  had  shortcom- 
ings. Little  German  capital  was  invested  in  Latin 
America.  Bribery  and  dishonesty  were  used  to 
advantage  in  holding  business — the  bribery  of  customs 
officials  and  the  use  of  false  invoices,  for  instance. 
And  as  we  know  now,  her  trade  was  subordinate  to 
imperialistic  schemes. 

But  the  German  selling  and  banking  organization  is 
still  strong  in  Latin  America.  Germany's  need  for  ex- 
port trade  is  more  desperate  than  that  of  any  other 


172       BUSmESS  IN  SOUTH  AMEEICA 

country.  The  German  is  facing  the  facts,  handling 
other  nations'  goods  without  prejudice  to  keep  his  trade 
machinery  intact  until  German  goods  are  available 
again,  and  working  harder  than  ever.  He  has  his 
characteristic  national  products,  as  the  British  and 
American  have  theirs,  and  in  those  lines  will,  to  use  a 
British  saying,  ^^take  a  bit  of  beating.'' 

France  was  fourth  in  Latin  American  business,  but 
less  a  competitor  of  the  Briton,  Yankee  or  German 
than  any  of  these  three  individually  with  the  others. 
Latin  America  loves  France  with  all  its  soul,  and  it 
was  the  invasion  of  France  that  swung  its  masses  to 
the  side  of  the  Allies  early  in  the  war,  despite  strong 
German  propaganda  and  influence  upon  Latin  Ameri- 
can governments.  France  sells  chiefly  the  artistic  and 
the  unique  things.  The  Latin  American  furnishes  his 
home  with  French  furniture,  tapestries,  paintings, 
sculpture,  bric-a-brac.  He  dresses  his  wife  and  daugh- 
ters in  French  gowns  and  hats,  and  adorns  them  with 
French  jewel  work.  He  sends  his  son  to  France  for 
schooling.  He  reads  French  literature,  and  speaks 
French  as  his  other  language. 

Spain  and  Italy  come  next,  and  while  their  sales  to 
Latin  America  are  not  large  compared  with  those  of 
Great  Britain  or  the  United  States,  Spanish  and 
Italian  influence  are  strong  in  some  of  the  South 
American  markets.  Many  of  the  importers  and  re- 
tailers of  Argentina,  Brazil  and  Uruguay  are  of  those 
nationalities,  and  success  in  marketing  demands  that 
one  understand  them  and  be  "simpatico." 

Portugal  is  strong  in  Brazil  in  the  same  way.     She 


THE  OTHEE  FELLOW  173 

does  not  sell  any  great  volume  of  goods  to  her  emanci- 
pated colony,  and  the  Brazilian's  feeling  against 
Portugal  and  the  Portuguese  is  often  strong.  But  much 
of  the  Brazilian  distributing  and  retail  trade  is  in  the 
hands  of  thrifty,  clannish  Portuguese,  and  success  in 
that  market  implies  understanding  and  sympathy,  too. 

Among  the  ^'other  fellows"  are  the  Belgians,  Hol- 
landers and  Swiss,  each  with  a  small  volume  of  trade, 
yet  each  having  its  own  banks  to  take  care  of  that  trade, 
and,  except  in  the  case  of  Switzerland,  its  own  ships. 
The  writer  will  not  soon  forget  his  first  impression  of 
Argentina  when,  ai'riving  on  a  slow  British  passenger 
ship,  crowded  with  Americans,  and  docking  at  Buenos 
Aires,  he  saw  a  magnificent  fast  liner  under  the  Dutch 
flag  in  all  the  bustle  of  departure,  with  flags  flying,  a 
band  playing  and  well-to-do  Argentines  embarking  with 
their  families. 

Japan  made  a  determined  effort  to  gain  a  trade 
foothold  in  South  America  during  the  war,  and  is  re- 
garded by  some  persons  as  a  ^'menace.''  She  is  colon- 
izing laborers  in  Brazil  and  other  countries,  and  the 
Jap  has  become  a  retail  merchant  in  Peru.  Steamship 
service  between  Japan  and  South  America  has  been 
maintained  for  years,  but  is  infrequent,  and  handi- 
capped by  lack  of  passenger  travel,  as  well  as  the  non- 
bulky  character  of  Japanese  merchandise.  To  reach 
South  American  markets  at  all,  it  is  necessary  to  load 
shipments  for  Europe  as  well,  making  the  circuit  of 
South  America,  then  going  to  European  countries  and 
returning  to  Japan  by  the  Panama  Canal.  Silk,  rice, 
cotton  goods,  and  hardware  are  sold  by  Japanese,  along 


174       BUSmESS  IN  SOUTH  AMEEICA 

with  the  familiar  toys,  bric-a-brac  and  knickknacks  of 
E'ippon.  There  seems  to  be  a  distinct  prejudice  against 
the  Japanese  as  immigrants,  and  also  dissatisfaction 
with  their  more  shoddy  and  imitative  products.  But 
under  great  handicaps  they  are  working  courageously 
and  persistently  to  establish  themselves  in  South  Amer- 
ican markets. 


CHAPTER  XIII 

WHAT  DO  SOUTH  AMERICANS  THINK  ABOUT  YANKEES! 

El  Paso,  Texas. — According  to  the  newspaper  Adelante^ 
published  in  the  City  of  Mexico,  the  Mexican  Foreign  Office 
has  obtained  complete  plans  drawn  up  in  the  United  States 
for  the  conquest  of  Mexico  after  the  coming  American  presi- 
dential election. 

New  York. — Senor  Naranjo  de  Oro,  a  South  American  poet, 
now  in  this  country,  calls  attention  to  a  new  book  by  the 
brilliant  Latin  American  novelist,  Cabeza  de  Chiquito,  in  which 
he  declares  that  a  barbaric  invasion  of  Yankees  has  already 
engulfed  Central  America  and  the  West  Indies.  The  book  is 
said  to  be  widely  circulated  in  South  America. 

Rio  de  Janeiro. — The  eminent  Brazilian  feuilletoniste,  Caboclo 
de  Corumba,  who  has  recently  published  articles  here  strongly 
antagonistic  to  the  United  States,  asserts  in  a  new  article  pub- 
lished this  morning  that  the  United  States  is  the  Prussia  of 
to-morrow,  which  Latin  America  must  combine  to  fight. 

The  reader  has  probably  seen  items  of  this  sort  in 
our  daily  papers  from  time  to  time,  and  wondered  how 
Latin  Americans  can  believe  such  piffle.  The  thought 
that  it  is  "widely  circulated  in  South  America/'  may 
have  made  him  a  little  uneasy. 

However,  fot  reassurance,  it  may  be  said  that  such 
views  are  not  widely  circulated,  and  that  far  from 
believing  them,  intelligent  South  Americans  know  that 

175 


176       BUSmESS  m  SOUTH  AliEEICA 

they  are  largely  political  in  motive.  The  "Yaiikee 
peril''  is  a  handy  little  stage  property  of  the  Latin 
American  demagogue  and  yellow  journalist,  just  as  it 
is  with  our  nearer  neighbor  Canada.  Sometimes  it 
lands  a  candidate  or  even  a  party  in  office.  But  South 
Americans  in  general  no  more  believe  it  than  the 
Canadians,  being  too  sophisticated  in  world  affairs  be- 
cause their  own  newspapers  publish  world  news  in  the 
greatest  detail. 

The  worst  aspect  is,  that  it  indicates  a  lack  of  knowl- 
edge about  ourselves  in  South  America.  That  in  turn 
is  due  partly  to  our  own  superficial  knowledge  of  the 
real  people,  issues  and  things  on  the  Southern  conti- 
nent. 

If  you  had  a  pretty  sweetheart,  and  also  a  rival, 
and  your  rival  talked  to  her  every  day  about  what  sort 
of  fellow  he  wanted  her  to  think  you  were,  and  you 
never  got  a  chance  to  say  anything  for  yourself — where 
would  you  stand? 

South  America  is  the  pretty  girl,  Europe  has  been 
the  rival,  and  the  United  States  has  been  the  silent, 
injured  party. 

All  the  important  South  American  countries  have 
good  newspapers.  They  pay  a  great  deal  of  attention 
to  world  affairs,  receiving  daily  cable  dispatches  from 
almost  every  country  on  the  globe.  Cable  news  is  sup- 
plemented by  frequent  articles  from  their  special 
correspondents  in  other  countries.  The  South  Ameri- 
can is  proud  of  his  cosmopolitanism.  Descent  from 
Spain,  Portugal  or  Italy  gives  him  an  interest  in  those 
countries,  his  education  and  reading  an  interest  in 


WHAT  DO  SOUTH  AMERICANS  THINK?    177 

France,  his  business  affairs  an  interest  in  England. 
Hence  gi-eat  newspapers  like  La  Nacion  and  La  Prensa 
in  Buenos  Aires,  and  0  Paiz,  Jornal  do  Brasil  and 
Estados  de  Sao  Paulo,  in  Brazil,  will  publish  a  dozen 
columns  of  closely  condensed  foreign  news  daily  from 
several  different  news  associations  and  sei-yices.  Meas- 
ured by  their  smaller  circulation  and  heavier  expenses, 
that  is  equivalent  to  half  a  dozen  pages  of  foreign  news 
in  one  of  our  big  city  dailies. 

But  for  years  the  bulk  of  South  America's  foreign 
news  had  been  coming  from  Europe,  including  nearly 
all  news  about  the  United  States.  We  had  no  news 
service  to  the  Southern  countries.  The  Briton,  Ger- 
man, Frenchman,  Italian,  Spaniard,  Portuguese  and 
Others  have  business  interests  to  protect.  Very  often 
politics  complicate  their  interests.  Supplying  most  of 
South  America's  cable  news,  they  might  give  it  an 
appropriate  color,  if  not  through  self-interest,  then 
through  temperament.  When  there  were  selfish 
motives,  they  could  say  nice  things  about  themselves, 
damaging  things  about  their  rivals,  and  awful  things 
about  us.  But  deliberate  propaganda  was  not  as  harm- 
ful as  their  selections  from  our  news  for  transmission 
to  South  American  journals.  For  the  European  jour- 
nalist, knowing  little  or  nothing  about  the  United 
States,  is  partial  to  our  ''yellow"  news.  Murder  trials, 
political  scandals,  divorces,  lynchings,  millionaires, 
monkey  dinners — these  have  always  been  the  most  in- 
teresting things  about  Yankeeland.  Fed  upon  them 
via  Europe,  with  little  of  the  real  news  from  our  coun- 
try, the  South  American  has  come  to  regard  tlie  United 


178       BUSINESS  IN  SOUTH  AMEKICA 

States  as  a  land  of  crooked  politicians  and  rich 
bounders,  where  wives  are  swapped  over  night,  white 
men  hunt  black  men  through  the  streets  for  sport,  and 
the  Monroe  Doctrine  will  get  you  if  you  don't  watch 
out.  Little  wonder  he  exclaims,  "Caramba,  what  a 
country !" 

When  we  entered  the  war,  it  became  highly  impor- 
tant to  have  South  American  sympathy.  Investigation 
of  the  state  of  public  opinion  even  in  a  country  so 
friendly  toward  us  as  Brazil  demonstrated  that  the 
Southern  republics  knew  little  about  us  that  was  true. 
In  countries  like  Chile,  with  strong  German  influences 
at  work,  and  old  grievances  left  over  from  diplomatic 
incidents  of  the  past,  the  situation  was  more  serious. 

Uncle  Sam  set  out  to  put  himself  right  with  the 
South  American  countries  by  telling  them  something 
about  his  war  program  and  preparations.  Uncolored 
news  dispatches  were  cabled  to  South  American  jour- 
nals without  charge,  and  offices  opened  in  the  principal 
countries  for  the  distribution  of  bulletins,  posters,  mov- 
ing pictures  and  like  mediums  of  information.  Then 
it  was  discovered  that  South  America  was  really  hun- 
gry for  constructive  news  about  the  United  States,  and 
two  big  American  news  agencies  established  South 
American  offices  and  service — the  Associated  Press 
and  the  United  Press. 

To-day,  real  news  from  the  United  States  is  printed 
on  the  front  pages  of  leading  journals  in  Kio  de 
Janeiro,  Sao  Paulo,  Buenos  Aires,  Montevideo,  Santi* 
ago,  Lima,  South  Americans  show  the  keenest  interest 
in  our  politics  and  foreign  policies.     They  like  our 


WHAT  DO  SOUTH  AMERICANS  THINK?    179 

crisp  style  of  reporting,  whicli  is  in  contrast  to  tlie 
solid  prosiness  of  the  European  journalist.  They  like 
the  headline  possibilities  of  American  news,  and  are 
learning  to  break  up  their  classification  of  cable  news 
by  countries,  a  characteristic  which  makes  South 
American  newspapers  unattractive  and  hard  to  read. 
American  news  service  has  quickly  become  popular 
with  South  American  readers,  who  are  learning  the 
truth  about  us,  and  want  more  of  it.  Publishers  pay 
for  our  news  service,  though  there  is  the  competition 
of  subsidized  European  news,  and  are  impressed  by  its 
impartiality.  They  have  learned  that  anything  unfa- 
vorable to  the  United  States  will  be  reported  as  faith- 
fully by  our  news  associations  as  something  favorable. 
It  has  been  a  little  hard  for  them  to  realize  that  such 
institutions  as  the  Associated  Press  and  the  United 
Press  can  exist  without  government  subsidies. 

Another  valuable  medium  of  information  about  our- 
selves is  the  moving  picture,  from  which  South 
Americans  are  learning  much  about  Yankees  as  people, 
and  about  American  life.  To  be  sure,  the  movies  are 
sensational,  with  their  gunmen  and  crooks,  their 
romance  and  action.  But  their  characters  and  settings 
are  often  more  American  than  we  suspect  ourselves, 
and  along  with  the  quick  thrills  the  South  American 
gets  ideas  about  everyday  Americans  in  their  every- 
day life.  Our  movie  fans  watch  the  pictures  for  dis- 
crepancies— the  heroine  leaving  the  room  in  tan  shoes, 
and  emerging  a  moment  later  wearing  white  slippers. 
But  South  American  fans  watch  the  heroine  telephone 
to  the  police,   the  villain  cash  the  stolen  check,  the 


180       BUSINESS  m  SOUTH  AMEPJCA 

beautiful  plumbing  in  the  vampire's  bathroom,  the 
ingenue's  frank  comradeship  with  men.  Our  clothes, 
houses,  furniture,  decorations  and  comforts  are  being 
studied  in  the  movies,  and  they  are  being  copied.  And 
here  is  a  channel  of  information  in  which  we  have 
practically  no  competitors.  Italian  and  French  pic- 
tures are  occasionally  shown  in  South  American 
theaters,  and  the  British  are  making  earnest  efforts  to 
establish  a  moving  picture  industry.  But  we  have  a 
long  lead.  Our  movies  are  preferred  for  their  action, 
and  our  own  enormous  home  demand  makes  it  pos- 
sible to  invest  large  sums  in  producing  pictures,  and 
export  a  surplus  to  other  countries  as  a  side  issue  after 
production  costs  have  been  covered  by  home  demand. 

Information  distributed  through  such  channels 
makes  it  more  difficult  to  persuade  South  Americans 
that  we  are  dollar  chasers,  grabbers  of  territory,  and 
have  horns  and  hoofs.  It  is  forming  sound  public 
opinion,  and  creating  good  will. 

The  demagogue  and  yellow  journalist  still  arise 
from  time  to  time  and  point  with  alarm  to  the  '^Yankee 
peril."  But  the  real  South  American  people  are  be- 
coming far  less  credulous  in  such  matters  than  we 
ourselves  about  Oriental  and  other  "perils." 

One  of  the  most  malicious  attacks  of  this  sort  will 
still  be  remembered — that  of  a  talented  Brazilian  jour- 
nalist who  systematically  vilified  the  United  States  in 
a  series  of  articles  published  in  Rio  de  Janeiro  news- 
papers. Brazilians  in  the  United  States  and  at  home 
went  out  of  their  way  to  discredit  this  writer  and  his 
articles,  and  a  semi-official  disclaimer  was  put  in  the 


WHAT  DO  SOUTH  AMERICANS  THIKK  ?    181 

form  of  a  syllogism.  ^^Tliere  are  some  international 
things,"  it  ran.  ^^Money  is  an  international  thing. 
This  man  is  an  international  man," 

To  most  Americans,  the  Latin  American  countries 
are  a  close  confederation  when  it  comes  to  policies, 
opinions,  aspirations  and  ideals.  When  we  think  of 
anti-American  agitation  sweeping  from  one  politician 
or  writer  in  a  single  country  over  the  whole  South 
American  continent,  it  makes  us  nervous. 

But  in  realitv  the  Latin  American  countries  are 
all  isolated  from  one  another — so  much  so  that  Senor 
Carlos  Silva  Cniz,  director  of  the  Chilean  ISI'ational 
Library,  is  endeavoring  to  bring  them  closer  together 
for  the  exchange  of  that  technical,  economic  and  scien- 
tific literature  so  necessary  for  their  material  de- 
velopment. 

If  a  Chilean  writes  a  useful  book,  it  is  read  in  his 
own  country,  but  not  in  nearby  Argentina  or  Peru, 
much  less  distant  Central  American  countries,  or 
Brazil,  where  Portuguese  is  the  language. 

In  no  Latin  American  country  does  the  reading  pub- 
lic exceed  a  million  people — I  mean  that  many  people 
actually  able  to  read.  In  some  of  the  small  countries 
it  may  be  a  few  thousands.  If  Latin  American  books 
circulated  widely  in  the  different  countries  large  editions 
could  be  published.  But  they  don't,  and  the  sale  of  a 
Latin  American  book  is  small,  and  publication  seldom 
profitable. 

As  with  news  before  our  service  was  extended  to 
his  daily  papers,  the  South  American  who  knows  any- 
thing at  all  of  the  United  States  through  reading — its 


182       BUSINESS  IN  SOUTH  AMEKICA 

people,  cliaracter,  work  and  ideals — ^knows  it  only 
through  European  books.  In  the  main  these  are  works 
written  by  foreign  visitors  to  the  United  States,  seeing 
us  through  French  or  other  European  spectacles.  Thus 
there  is  a  double  distortion,  and  for  the  Latin  Ameri- 
can investigator  bent  upon  adapting  our  practical 
achievements  in  his  own  country,  a  distance  certain  to 
defeat  his  efforts.  The  time  element  enters  into  it 
also,  for  matters  in  which  we  are  making  progress 
to-day  may  not  be  reported  from  Europe  for  years,  or 
may  be  overlooked  altogether. 

Very  few  American  books  are  sold  on  the  Southern 
continent  because  our  publishers  have  not  established 
outlets  or  connections.  Each  large  city  has  its  "Eng- 
lish bookstore,''  usually,  but  the  stock  in  trade  is 
chiefly  British  fiction,  with  some  American  "best 
sellers,"  and  scarcely  a  five^foot  shelf  of  solider  works, 
either  British  or  American.  The  most  enterprising 
publishers  are  those  in  the  United  States  issuing  tech- 
nical handbooks  dealing  with  machinery,  electricity, 
♦mining,  chemistry  and  like  practical  subjects.  They 
seem  to  have  worked  out  a  scheme  of  distribution  that 
lands  their  books  where  they  are  wanted,  and  other 
publishers  in  the  United  States  and  England  ought  to 
find  out  how  they  do  it. 

Senor  Cruz  has  a  plan  for  breaking  down  the 
Chinese  walls  around  the  different  countries,  and  also 
the  two  continents.  He  suggests  that  the  ITational 
Library  in  each  country,  including  the  United  States, 
establish  a  bureau  of  Pan-American  bibliographic  in- 
formation,  ^cataloguing  its   own   data   on   economics, 


WHAT  DO  SOUTH  AMEEICAI^S  THmK.  ?    183 

political  organization,  science,  history,  and  literature, 
on  a  standai'd  system.  This  information  would  then 
be  exchanged  by  all  the  countries,  and  distributed  to 
their  universities,  government  departments,  authors, 
editors  or  whomsoever  might  want  it  in  his  work. 

Special  infoi-mation  would  also  be  furnished  to 
investigators  of  special  subjects,  so  that  a  Chilean  in- 
terested in  American  educational  methods,  or  Central 
American  music,  or  Brazilian  livestock  improvement, 
could  be  put  in  touch  with  the  latest  facts. 

The  national  libraries  can  also  establish  an  inter- 
national commerce  in  books,  receiving  volumes  of 
general  interest  from  publishers  in  other  countries, 
placing  them  in  bookstores,  and  collecting  money 
when  sold.  The  volumes  would  have  to  be  sent  on 
approval,  of  course,  and  unsold  books  taken  back  by 
the  publishers,  but  after  a  time  experience  would  un- 
questionably show  which  books  aroused  interest  in 
other  countries,  and  the  mere  accessibility  of  the  books 
would  encourage  their  sale.  From  our  standpoint  there 
is  every  reason  to  make  representative  American  books 
available  on  some  such  plan,  because  Latin  America 
has  a  new  interest  in  us  since  the  war,  and  thousands 
of  her  young  people  are  learning  English.  In  the 
American  department  of  the  Chilean  Library  there 
are  forty  to  fifty  readers  daily  consulting  our  books 
on  educational,  economic,  technical  and  other  subjects. 

As  the  South  ximerican  has  his  ^^Yankee  peril,''  so 
we  have  our  mistaken  notions  about  the  Southern 
countries  and  peoples,  due  to  the  same  cause — lack  of 
information. 


184       BUSLNTESS  IN  SOUTH  AMEBIC  A 

South  America  is  now  getting  news  about  us.  But 
very  little  South  American  news  appears  in  our  own 
daily  papers.  Dispatches  from  that  part  of  the  world 
deal  chiefly  with  the  abnormal — strike  riots  in  Argen- 
tina, a  ^^manifestacion'^  against  some  legation  in  Eio 
de  Janeiro  in  sympathy  with  European  diplomatic 
squabbles,  political  disturbances  in  this  country  or 
that,  played  up  as  "revolutions."  Some  of  us  might 
name  one  South  American  president,  and  tell  what  he 
stands  for,  but  to  name  more  than  two  would  be  qualifi- 
cation as  a  Pan-American  specialist.  We  know  hardly 
any  of  the  men,  parties  or  political  issues  in  the  differ- 
ent countries.  The  South  Americans  meet  us  face  to 
face  in  the  movies,  but  we  seldom  get  a  chance  to  see 
them  in  our  movie  news. 

In  recent  years  our  interest  in  South  America  seems 
to  be  growing.  The  journeys  of  Colonel  Koosevelt, 
Mr.  Eoot  and  other  distinguished  Americans,  the 
stationing  of  American  warships  in  the  Southern  hem- 
isphere during  the  war,  and  the  bringing  of  South 
America  into  our  daily  news,  have  led  the  average 
American  to  read  about  it.  An  increasing  number  of 
books  dealing  with  South  America  has  been  published 
lately  in  the  United  States.  One  work  in  particular, 
the  novel  El  Supremo,  indicated  an  unsuspected  desire 
of  our  reading  public  to  know  more  about  our 
Southern  neighbors  than  we  had  learned  from  adven- 
ture stories  like  those  of  Eichard  Harding  Davis. 
This  novel  dealt  with  Paraguay  in  the  days  of  the 
Dictator  Francia.  The  period  was  one  hundred  years 
ago,  and  the  author  had  never  been  in  South  America, 


WHAT  DO  SOUTH  AMERICAi^S  THIXK  ?    185 

but  worked  entirely  from  documents.     His  book  con- 
tains many  descriptions  of  South  American  people  and 
tlieir  everyday  life,  and  these  seem  to  be  most  inter- 
esting to  Americans,  though  those  people,   and   their 
life  and  manners,  have  disappeared.     It  is  said  that 
Paraguay,    far   from   preserving   its   quaintness,    now 
seeks  to  emphasize  its  progressiveness.     To  that  end, 
women  are  forbidden  to  smoke  cigars  in  the  streets  of 
its  capital,  and  when  can-ying  bundles  on  their  heads 
must  not  use  the  sidewalks !     Following  this  new  read- 
ing interest,  steps  are  being  taken  to  publish  transla- 
tions of  South  American  books  in  the  United  States — - 
novels  and  tales  by  authors  in  the  different  countries 
which  depict  their  people  and  life  at  various  periods. 
Information,    interest    and    acquaintance    on    both 
sides   create   goodwill.     Goodwill   is   a   valuable   busi- 
ness asset;  for  us,  a  basis  upon  which  to  sell  manu- 
factured goods  in  South  America,  and  for  the  South 
Americans  a  basis  upon  which  to  market  their  products 
and     develop     their     resources.     But     good^vill     goe3 
farther  than  business.     Nothing  is  more  badly  needed 
than  broad  public  opinion  in  the  two  continents,  based 
on  understanding  of  the  man  in  the  street  in  ^ew  York 
about  the  man  in  the  street  in  Rio.de  Janeiro,  Buenos 
Aires,  Montevideo,  Santiago  and  Lima.     The  man  in 
the  street  in  Buenos  Aires  thinks  the  man  in  the  street 
in  !N'ew  York  is  a  dollar  chaser,  if  he  thinks  about  him 
at  all.     And  the  man  in  the  street  in  New  York  be- 
lieves that  the  man  in  the  street  in  Buenos  Aires  is 
an  Indian.     For  lack  of  acquaintance  and  understand- 


186       BUSINESS  m  SOUTH  AMEEICA 

ing,  there  has  been  a  lack  of  public  opinion  and  good- 
will handicapping  many  projects  which  might  have 
been  carried  out  for  the  mutual  benefit  of  all  the 
Americas. 


CHAPTER  XIV 

THE  IMPORTANCE  OF  BUYING  AS  WELL  AS  SELLING 

'Nine  in  every  ten  of  the  books  and  articles  about 
South  America  published  in  the  United  States  deal 
with  the  same  subject — how  to  sell  goods  on  the  South- 
ern continent,  pack  goods,  ship  goods,  collect  the  money 
for  goods. 

Very  little  is  published  about  the  other  side  of  our 
trade — the  buying  of  South  America's  products,  the 
development  of  markets  for  them,  the  increase  of  pro- 
duction, the  establishment  of  industries  for  working 
them  up  down  there,  the  effect  of  South  American 
products  upon  our  own  industries. 

Yet  this  is  a  larger  part  of  our  trade  than  selling. 
We  are  South  America's  best  customer,  buying  in 
dollars  nearly  twice  as  much  as  we  sell  her.  The 
balance  of  trade  is  in  favor  of  every  one  of  the  South 
American  republics,  from  Brazil  down  to  Paraguay. 
This  is  also  true  of  eight  Central  American  republics, 
only  Honduras  and  Hayti  buying  more  from  us  than 
they  sell. 

The  largest  investment  of  our  capital  in  South 
America  is  a  buying  and  manufacturing  enterprise — 
the  American  packing  houses.  Until  Chicago  packers 
created  an  export  market  for  Argentina's  pork,  hogs 

187 


188       BUSmESS  IN  SOUTH  AMERICA 

were  hardly  wortli  raising  in  that  country,  except  for 
local  demand.  When  that  had  been  met,  there  was  no 
outlet  for  the  animals.  If  an  Argentine  rancher 
raised  good  hogs  in  any  number  he  was  so  certain  to 
lose  money  that  hogs  had  become  a  rancher's  joke. 
But  to-day  the  American  packing  houses  at  La  Plata 
buy  hogs  in  any  number,  as  a  policy,  even  though  it  is 
necessary  to  hold  pork  products  in  cold  storage.  They 
have  created  a  stable  world  market.  They  are  en- 
couraging the  industry  by  importing  fine  breeding 
animals  from  the  United  States  for  sale  to  ranchers  at 
cost.  Argentina's  swine  are,  therefore,  being  brought 
up  to  the  same  high  standard  as  her  cattle,  horses  and 
sheep. 

In  Paraguay  the  American  packers  have  rendered 
another  service.  That  country  is  too  remote  from 
world  markets  to  ship  fresh  frozen  beef,  and  its  cattle 
of  too  poor  grade  for  the  purpose,  even  were  markets 
accessible.  Until  the  packers  came,  Paraguayan  cattle 
were  killed  chiefly  for  jerked  beef,  mildly  pickled  and 
sun  dried,  a  staple  food  of  Latin  Americans  from 
Brazil,  where  it  is  called  "xarque,"  to  Cuba,  where  it 
is  popular  as  "tasajo."  When  war  created  a  demand 
for  the  ^^bully  beef"  of  the  soldiers'  rations,  American 
packers  were  able  to  establish  canned  corned  beef 
plants  in  Paraguay,  the  half-wild  cattle  raised  for 
jerked  beef  being  excellent  "canners."  Peace  brought 
a  slackened  demand  for  this  staple,  yet  the  packers  are 
still  running  their  plants  and  endeavoring  to  increase 
civilian  demand  for  canned  corned  beef  in  Europe,  so 
Paraguay's  road  to  world  markets  will  not  be  blocked. 


BUYING  AS  WELL  AS  SELLING        189 

Many  of  our  industries  have  been  built  upon  Latin 
American  materials.  Were  these  materials  unobtain- 
able, the  industries  would  cease.  Without  industries, 
the  materials  would  be  practically  unsalable. 

Probably  the  most  interesting  example  of  such 
interdependence  is  chewing  gum,  made  from  chicle. 
Until  the  war,  it  was  so  characteristic  an  American 
specialty  as  to  be  a  subject  of  humor  in  other  countries. 
Then  the  strain  of  trench  life  and  soldiering  extended 
its  use  abroad. 

The  importance  of  Latin  America  to  our  industries 
is  indicated  by  a  few  figures.  We  purchase  from  South 
and  Central  America  56  per  cent  of  our  total  imports 
of  hides  and  skins  for  leather,  67  per  cent  of  our  bones 
and  horns  for  buttons  and  miscellaneous  products,  30 
per  cent  of  our  wool,  100  per  cent  tin,  100  per  cent 
nitrate  and  iodine,  70  per  cent  copper,  78  per  cent 
tungsten,  42  per  cent  platinum,  100  per  cent  bananas 
and  pineapples,  98  per  cent  coffee,  98  per  cent  cocoa- 
nuts,  98  per  cent  sisal  fiber  for  binder  twine,  83  per 
cent  guano  and  67  per  cent  tankage  for  fertilizer,  along 
with  v^etable  ivory,  vegetable  wax,  manganese,  tan- 
ning extracts,  dyewoods,  flavorings,  spices  and  other 
products. 

But  for  British  enterprise  in  developing  plantation 
rubber,  we  should  to-day  probably  be  actively  cooper- 
ating with  the  Brazilians  to  increase  the  supply  of 
wild  rubber  upon  which  the  success  and  gi'owth  of  our 
automobile  industry  would  depend,  along  with  in- 
numerable other  industries  based  upon  rubber.  We 
use  to-day  four  pounds  of  rubber  yearly  per  capita. 


190     BusmESS  m  south  amekica 

half  of  it  for  automobile  tires.  Brazil's  output  would 
provide  onlv  a  single  tire  and  an  extra  inner  tube  for 
each  automobile  in  the  United  States,  leaving  no  rub- 
ber for  any  other  purpose,  or  any  other  country.  If 
Brazil  herself  had  good  roads  and  motor  transport  in 
keeping  with  her  needs,  her  38,000  tons  of  rubber 
would  not  meet  her  own  requirements.  When  a  rubber 
shortage  threatened  our  industries  in  the  years  from 
1905  to  1912,  Brazilian  producers  did  not  increase  the 
output — Brazilian  speculators  simply  ran  prices  from 
seventy-five  cents,  then  normal  and  profitable,  to  two 
and  three  dollars  a  pound.  That  ultimately  worked 
damage  to  Brazil,  because  American  manufacturers 
were  forced  to  drop  unfounded  prejudice  against  plan- 
tation rubber  and  discover  its  merits.  To-day 
Brazilian  rubber  brings  less  than  fifty  cents  a  pound, 
despite  its  admitted  qualities.  The  Amazon  industry 
faces  a  period  of  reconstruction  and  organization,  and 
when  that  comes  the  influence  of  the  American  rubber 
buyer  and  manufacturer  will  be  indispensable. 

A  similar  opportunity  is  found  at  this  writing  in 
the  cacao  industry  of  the  Central  and  South  American 
countries  in  the  tropical  zone.  The  demand  for  choco- 
late and  cocoa  has  been  so  great  that  growers  of  this 
product  were  forced  to  adopt  intensive  methods  of  cul- 
tivation— selection  of  heavy-bearing  varieties,  scientific 
methods  of  curing  and  grading,  and  the  like.  In  1913, 
70  per  cent  of  the  cacao  imported  into  the  United 
States  came  from  Latin  American  countries.  But,  as 
with  rubber,  Africa  and  the  East  Indies  are  develop- 
ing production  on  modem  scientific  lines.     Starting 


BUYING  AS  WELL  AS  SELLING       191 

with  negligible  exports  iu  1910,  these  countries 
shipped  lis  nearly  35  per  cent  of  our  imports  in  1919, 
with  a  corresponding  decrease  in  Latin  American  ship- 
ments. The  editerprise  of  the  American  buyer, 
financier  and  scientist  will  ultimately  be  needed  to 
enable  Latin  American  cacao  producing  countries  to 
increase  their  output  and  improve  quality,  and  it  is  a 
distinct  opjx>rtunity  in  tropical  Brazil,  Ecuador, 
Venezuela  and  Central  America. 

There  is  little  need  to  explain  the  direct  benefits 
to  any  American  community  of  a  selling  market  in 
Latin  America  for  its  manufactured  products.  Com- 
munity pride  and  enterprise  are  strong  with  us,  and 
new  orders  for  dehydrating  machinery  from  Chile,  or 
a  large  shipment  of  lister  plows  to  Argentina  from 
^^our  town,"  attracts  more  attention  than  routine  sales 
at  home. 

But  there  is  community  benefit  to  he  secured  on 
the  buying  end  as  well.  An  excellent  illustration  is 
the  effort  of  San  Francisco  importers  to  divert  Cen- 
tral American  coffee  shipments  to  that  city,  instead 
of  purchasing  through  New  Orleans,  with  the  long 
railroad  haul  to  the  Pacific  Coast.  Starting  with  ac- 
curate knowledge  of  the  qualities  of  Central  American 
coffees,  the  importers,  brokers  and  coffee  roasters 
undertook  an  advertising  campaign  in  Central  Ameri- 
can newspapers,  showing  growers  the  advantage  of  that 
city  as  a  market.  These  advertisements,  in  the  foi*m 
of  short  talks  in  Spanish,  were  published  in  Guatemala, 
Salvador,  Nicaragua  and  Costa  Rica.  They  pointed 
out  the  advantages  of  San  Francisco  as  a  market,  com- 


192       BUSIISTESS  IN  SOUTH  AMEEICA 

pared  with  Europe  and  our  Eastern  states,  gave  figures 
of  wealth  on  the  Pacific  Coast  and  the  increasing  de- 
mand for  coffee,  explained  that  Pacific  Coast  taste 
prefeiTed  Central  American  coffees,  dwelt  upon  the 
economies  in  shipping  direct,  and  invited  coffee 
gi'owers  and  exporters  to  visit  San  Erancisco.  The 
outcome  of  this  well-planned  buying  campaign  was 
to  increase  San  Erancisco' s  receipts  of  Central  Ameri- 
can coffees  more  than  200  per  cent  in  ^ve  years. 

In  Peru  the  cotton  crop  includes  a  fine  gi*ade  of 
tree  cotton,  known  as  ^'rough  Peruvian,''  with  a  kinky 
wool-like  fiber  that  makes  it  suitable  for  flannels  and 
mixed  goods.  Before  the  war  the  buying  of  this  cotton 
was  in  German  hands,  although  we  took  sixty  per  cent 
of  the  crop  at  prices  fifty  per  cent  higher  than  those 
paid  for  our  own  cotton.  War  made  it  necessary  for 
a  large  ISTew  Hampshire  mill  to  send  its  own  purchas- 
ing agent  to  Peru,  eliminating  ^ve  different  profits 
between  field  and  factory,  as  well  as  securing  the  cream 
of  the  crop. 

The  buying  viewpoint  in  South  America  demands 
more  attention  from  us.  We  have  concentrated  the 
efforts  of  the  exporter  and  salesman  there,  neglecting 
opportunities  for  the  purchasing  agent,  chemist,  de- 
signer and  engineer  to  obtain  and  utilize  materials. 
Traffic  in  these  materials  has  often  been  controlled  by 
European  capitalists,  manufacturers  and  buyers,  to 
our  disadvantage  and  cost.  The  costs  have  been 
assessed  against  us  in  unsuspected  buying  and  banking 
commissions.  We  have  been  handicapped  in  selling 
manufactured  goods  to  South  America  by  the  triangu- 


BUYING  AS  WELL  AS  SELLING       193 

lar  routing  of  South  America's  raw  materials  to  our 
ports,  and  the  hauling  of  our  own  raw  materials  to 
European  factories  for  making  merchandise  to  be 
sold  in  South  America  again  on  the  third  leg  of  the 
triangular  voyage. 

Our  largest  single  purchase  in  South  America  is 
coffee.  As  Brazil's  largest  customer,  we  have  been 
able  to  get  certain  tariff  preferences  for  American 
goods  entering  that  country.  But  they  are  declared 
to  be  largely  on  paper.  Thirty  per  cent  preference 
is  allowed  on  American  wheat  flour — but  Brazil  is 
buying  flour  from  Argentina,  and  also  growing  wheat 
preparatory  to  making  her  own.  As  good  customers 
for  Brazilian  rubber,  we  are  entitled  to  a  preference 
on  every  manufactured  article  of  that  substance  sold 
her  if  the  raw  rubber 'was  Brazilian.  But  only  theo- 
retically— it  has  been  so  hard  to  prove  that  the  rubber 
in  a  tire  or  inner  tube  is  of  Brazilian  origin  that  the 
preference  is  practically  noneffective.  Other  tariff 
preferences  are  granted  upon  manufactured  rubber 
articles,  cement,  condensed  milk,  di'ied  fruit,  scales, 
refrigerators,  typewriters,  windmills,  school  furniture, 
pianos,  roll-top  desks,  clocks,  paints  and  varnishes. 
But  the  trade  advantage  to  us  has  been  small  compared 
with  Europe's  advantages  in  having  buyers  on  the  spot, 
financing  its  purchases  of  raw  materials,  and  routing 
them  in  its  own  ships. 

Buying  is  intricately  tied  up  with  our  investments 
in  South  America.  As  an  example,  our  largest  invest- 
ment there  at  this  writing  is  in  meat  packing  plants. 
The  meat  packing  industry  earns  its  profits  by  careful 


I 

194       BUSINESS  IN  SOUTH  AMEEICA 

utilization  of  by-products.  In  Argentina  a  local  cor- 
poration, composed  largely  of  ranch  owners,  built  a 
cooperative  packing  plant,  managed  by  Argentinos. 
When  the  Chicago  packers  came  to  Buenos  Aires,  this 
plant  was  losing  money,  and  even  its  stockholders  pre- 
ferred to  sell  their  live  cattle  to  the  Americans  because 
the  latter  offered  higher  prices.  Eventually  the  co- 
operative plant  was  sold  to  the  Americans,  and  in  the 
first  year  under  their  management  $250,000  was  made 
on  waste  material  which  the  Argentinos  had  been  pay- 
ing to  have  hauled  away  to  a  dump. 

With  all  the  refinements  in  our  packing  technique 
the  American  plants  in  Argentina,  Uruguay  and 
Brazil  have  thus  far  been  unable  to  find  a  market  for 
such  profitable  delicacies  as  sweetbreads,  pork  tender- 
loins, choice  cuts  of  beef  and  spring  lamb.  South 
Americans  produce  spring  lamb,  but  do  not  eat  it. 
Sweetbreads  are  not  eaten  either,  and  pork  tender- 
loins must  go  into  sausage  for  lack  of  a  local  market. 
Choice  cuts  of  beef  are  not  wanted,  because  the  whole 
philosophy  of  butchering  in  Latin  American  countries 
differs  from  our  own.  Eancy  steaks  and  roasts  are 
unobtainable,  because  Latin  taste  prefers  stewing  cuts, 
and  the  nearest  approach  to  a  steak  is  a  ^^filet,"  cut 
from  almost  any  part  of  the  carcass.  Latin  taste  is  also 
almost  entirely  for  fresh-killed  meat,  and  the  chilled 
beef,  which  we  prefer,  is  not  only  unkno^na,  but  in 
one  country  at  least — Uruguay — ^may  not  be  legally 
sold.  Thus  we  have  the  familiar  paradox  found  in 
many  other  famous  producing  regions — that  South 
America  ships  millions  of  sides  of  chilled  beef,  ready 


BUYING  AS  WELL  AS  SELLING        195 

to  be  cut  into  the  finest  steaks,  roasts  and  chops,  yet 
such  cuts  are  unobtainable  in  Buenos  Aires,  Monte- 
video, Sao  Paulo  and  Rio  de  Janeiro.  The  remedy 
for  this  situation  will  be  found  in  refrigerator  space 
on  our  merchant  ships,  enabling  American  packers 
on  the  Southern  continent  to  send  all  such  delicacies 
to  the  United  States,  where  a  profitable  market  awaits 
them.  Refrigeration  on  American  ships  will  also  make 
possible  an  exchange  of  such  seasonal  commodities  as 
eggs.  The  American  hen  reaches  her  peak  of  pro- 
duction in  April.  The  South  American  hen  is  busiest 
in  October.  Eggs  are  scarcest  and  dearest  in  South 
America  when  our  hens  are  laying  most  abundantly, 
while  eggs  are  most  plentiful  on  the  Southern  conti- 
nent diu'ing  the  months  from  October  to  January, 
when  prices  are  highest  with  us.  With  refrigerator 
ships,  and  the  organization  of  an  egg-collecting  and 
packing  industry  in  South  America,  we  can  relieve  our 
winter  shortage  with  eggs  from  the  Southern  countries 
and  in  turn  export  eggs  to  them  during  our  season  of 
plenty. 

Buying  is  also  intimately  tied  up  with  the  grave 
problem  of  return  cargoes  for  our  ships.  We  send 
twice  as  much  tonnage  to  the  East  Coast  of  South 
America  as  is  available  for  return  voyage.  Our  goods 
are  bulky — coal,  steel,  cement,  and  the  like.  In  re- 
turn, we  bring  back  coffee,  rubber,  goat  skins,  hides 
and  wool,  which  do  not  run  to  anything  approaching 
the  same  tonnage.  There  is  only  one  way  to  equalize 
this  tonnage — that  of  creative  buying  in  South  Ameri- 


196       BUSINESS  IN  SOUTH  AMEEICA 

can  countries  so  that  they  may  find  larger  markets  and 
increase  their  production. 

When  creative  American  buying  is  linked  with 
American  ships  and  American  investments,  the  South 
American  countries  v^ill  be  able  to  overcome  one  of 
their  gi'eatest  trade  handicaps^ — that  of  speculation  and 
fluctuation  in  their  products.  One  authority  declares 
that  Brazil,  for  instance,  has  never  had  a  normal  trade 
year.  Demand  and  production  have  not  only  shifted 
from  one  article  to  another,  now  sugar,  then  rubber, 
then  coffee,  or  cotton,  but  fluctuations  in  the  output 
and  the  world's  needs  have  changed  from  year  to  year. 
In  a  single  twelvemonth  the  price  of  rubber  dropping 
from  $1.50  to  50  cents  a  pound  has  set  the  rubber 
workers  collecting  Brazil  nuts  and  vegetable  wax. 
Overproduction  of  coffee  has  made  it  necessary  for 
the  Sao  Paulo  government  to  protect  growers  through 
an  elaborate  system  of  valorization,  and  also  directed 
attention  to  such  new  fields  of  agi'iculture  as  cattle 
raising.  Argentina  and  Uruguay,  with  their  meat  and 
grain  industries,  are  now  prosperous,  and  to-morrow 
losing  money,  according  to  changes  in  world  demand. 
Chile  thrives  when  her  sales  of  nitrates  are  large,  and 
must  retrench  when  the  demand  falls  off. 

Diversification  of  products  and  industries  is  the 
remedy  for  this  situation,  and  creative  buying,  with 
the  establishment  of  new  export  markets,  the  logical 
way  to  bring  it  about.  Creative  American  buying 
means  creative  selling  of  our  own  products,  for  the 
buying   power   of  the   South  American   masses   is   in 


BUYING  AS  WELL  AS  SELLING        197 

tlie  purchasing  agent's  province  no  less  than  that  of 
the  salesman. 

As  this  chapter  is  written,  an  excellent  example  of 
creative  buying  comes  to  hand — an  illustration  of 
American  methods  at  their  best,  but  in  another  part  of 
the  world.  An  American  manufacturer,  with  enormous 
war-created  facilities  for  turning  out  locomotives  and 
railroad  equipment,  visited  Eastern  Europe  seeking 
customers.  Railroad  equipment  was  desperately 
needed  in  the  Balkan  nations,  yet  with  depreciated 
currency,  exhausted  credit  and  other  handicaps,  pur- 
chases seemed  impossible.  An  American  locomotive 
paid  for  in  American  dollars  purchased  with  the  low- 
value  money  of  those  countries  would  have  cost  them 
in  real  values,  measured  in  their  own  work,  several 
times  the  price  at  which  we  sold  it.  Therefore,  Mr. 
Samuel  Yauclain,  of  the  Baldwin  Locomotive  Works, 
resorted  to  barter.  The  Balkan  countries  had  petro- 
leum, grain  and  other  raw  materials.  These  were 
accepted  as  payment  for  $100,000,000  worth  of  rail- 
road equipment,  and  arrangements  made  for  transport- 
ing and  selling  them  in  European  countries  that  needed 
raw  materials  as  badly  as  the  Balkans  needed  railroad 
reconstruction.  The  petroleum  and  gi^ain  were  turned 
into  American  currency,  realizing  a  profit  on  the  whole 
transaction,  without  further  burdening  the  purchasing 
countries  with  bond  issues,  or  forcing  them  to  seek 
outside  financial  assistance. 

Of  course,  direct  bai-ter  is  not  likely  to  enter  into 
our  business  with  South  American  countries,  for  their 
products  are  readily  marketable,  yielding  money  with 


198       BUSINESS  IN  SOUTH  AMERICA 

whicli  to  pay  for  anything  they  may  purchase.  But 
beneath  the  money  transactions  involved  the  frame- 
work of  barter  will  always  be  found.  To  ascertain 
what  people  in  different  countries  and  sections  of  South 
America  produce,  as  well  as  their  undeveloped  re- 
sources; to  help  increase  their  earning  and  purchasing 
power  by  developing  resources;  to  improve  their  prod- 
ucts through  grading  and  like  means,  and  finding  mar- 
kets or  providing  new  marketing  facilities — these  are 
inseparable  from  selling  and  exporting.  The  framework 
of  barter  always  exists.  In  South  American  capitals 
it  may  be  out  of  sight,  but  should  never  be  out  of 
mind.  As  the  cities  are  left  behind,  and  business  is 
carried  up  into  the  country,  it  becomes  more  and  more 
visible.  Constantly  to  take  this  barter  aspect  into 
account  is  to  see  business  whole  in  South  American 
transactions. 


CHAPTEK  XV 

ABOUT  "PICKING  UP"  THE  SPANISH  LANGUAGE 

The  island  of  Jamaica  has  a  Spanish  name,  derived 
from  an  old  Arawak  Indian  word.  More  than  half  its 
trade  is  with  the  United  States,  export  and  import. 
Guided  bj  the  name  only,  many  an  American  shipping 
clerk  assumes  that  it  is  ''one  of  them  South  American 
countries."  For  Jamaican  merchants  who  handle 
American  goods  frequently  receive  attractive  advertis- 
ing matter  printed  in  Spanish,  and  are  also  addressed 
in  that  language  by  American  con-espondents.  As 
Jamaica  is  a  British  colony,  nobody  understands 
Spanish ! 

The  American  business  man  has  long  been  scolded 
by  export  advisers  for  trying  to  do  business  with 
South  America  in  his  own  language. 

This  amusing  instance  seems  to  show  that  he  is  im- 
proving. 

Eeally,  we  do  better  nowadays  in  the  matter  of  the 
other  fellow's  language  than  most  people  suspect,  at 
least  in  South  America.  The  Yankee  salesman  trying 
to  sell  goods  there  without  Spanish  may  have  been 
numerous  once,  but  he  is  getting  scarce. 

Instead,  one  finds  throughout  Latin  America  a  class 

199 


200       BUSINESS  m  SOUTH  AMEKICA 

of  Yankees  who  have  been  living  Spanish,  as  well  as 
speaking  it,  these  twenty-odd  years. 

Our  Philippine  adventure  gave  us  thousands  of 
them,  and  everj^vhere  in  Latin  America  the  ex-soldier 
of  the  United  States  Army,  utilizing  his  Philippine 
experience,  is  found  in  executive  positions.  Thousands 
of  other  Yankees  have  been  driven  out  of  Mexico,  and 
are  selling  goods,  managing  branches,  holding  bank 
positions  on  the  Southern  continent.  Like  the  Philip- 
pine veterans,  they  are  a  clan,  fond  of  Spanish  ways, 
rich  in  Spanish  American  friendships,  and  still  in  love 
with  Mexico  as  a  country.  Other  representatives  have 
learned  Spanish  in  Porto  Eico,  linguistically  and  tem- 
peramentally. There  is  the  Cuban  who  has  become  a 
Yankee  through  schooling  or  business  training  in  the 
United  States,  almost  invariably  a  hustler  in  two  lan- 
guages. Many  Porto  Kicans  are  as  well  equipped  to 
represent  American  interests  in  the  Spanish-speaking 
countries. 

l^ot  so  often  nowadays  does  one  run  across  Yankees 
like  a  certain  salesman  who,  visiting  South  America 
for  the  first  time,  said  that  he  found  no  difficulty  at  all 
in  selling  goods. 

"But  you  speak  no  Spanish,  do  you?"  was  asked. 
'^How  do  you  get  along?" 

"Easy  enough!"  was  the  reply.  "I  take  an  inter- 
rupter with  me." 

The  chief  difficulty  in  this  language  question  is 
found,  not  in  South  America,  but  here  at  home. 

'Next  to  the  British,  we  are  the  most  hidebound  of 
nations  in  the  matter  of  languages.    The  British  steam- 


u 


PICKING  UP"  SPANISH  201 


ship  steward  will  spend  years  in  the  South  American 
service,  yet  never  learn  that  "cafe''  means  "coffee." 
Spanish-speaking  passengers  drive  him  distracted: 
"You  ca^^Ti't  understand  them,  sir,"  he  protests ;  "really, 
they  should  bring  an  interpreter  to  speak  English — 
this  is  an  English  ship,  you  know."  We  have  better 
language  opportunities,  with  our  diversified  immigra- 
tion. But  if  a  visitor  speaks  English  brokenly,  we 
class  him  contemptuously  as  a  "foreigner,"  which 
means  inferior,  though  he  may  speak  several  languages 
against  our  one. 

Attracted  by  the  South  American  as  a  possible  cus- 
tomer, our  first  thought  seems  to  be  that  he  probably 
speaks  English  anyw^ay,  being  a  "foreigner."  We  are 
so  accustomed  to  enterprise  among  foreigners  at  home 
in  this  matter  that  it  seems  natural  for  them  to  learn 
our  language.  Actually,  they  do — the  writer  voyaged 
to  Buenos  Aires  with  an  Argentino  consul  who  had 
learned  English  during  a  three  weeks'  visit  to  New 
York.  He  spoke  haltingly,  but  plainly.  "The 
secret?"  he  said,  producing  a  thick  lesson  book.  "It 
is  study — I  have  learned  that  by  heart." 

Finally,  making  the  tremendous  concession  that  the 
best  way  to  do  business  with  South  Americans  is  in 
their  own  language,  we  say,  "Well,  send  Jones  to  night 
school  for  a  few  weeks  before  he  goes  to  South  America. 
That  will  give  him  a  book  knowledge  of  Spanish.  He 
is  naturally  bright,  and  a  splendid  salesman.  When 
he  gets  down  there  he  will  soon  pick  up  the  language." 

Sometimes    we    have    heard — but    again    not — that 


202       BUSINESS  IN  SOUTH  AMEEICA 

about  forty  per  cent  of  the  South  Americans  speak 
Portuguese.  Spanish  and  Portuguese  will  take  one  over 
pretty  much  the  whole  continent,  yet  at  times  it  is  a 
fine  thing  to  know  Italian,  German  or  French. 

There  are  unquestionably  men  and  women  who  find 
it  easy  to  "pick  up"  languages.  A  veteran  salesman 
says  that,  thanks  to  an  inherited  gift,  he  was  able  to 
do  business  in  five  languages  on  his  first  trip  to  South 
America.  The  writer  once  met  a  Jew  who  spoke 
Chinese  fluently.  Children  are  often  born  into  two 
languages,  like  "Peter  Ibbetson,"  and  Du  Maurier,  his 
creator.  Language  seems  to  be  a  "bump,''  even  though 
phrenology  is  nowadays  discredited,  for  scientists  have 
found  its  areas  in  the  brain,  and  there  are  cases  where 
an  Englishman  learning  Greek  in  school,  and  later 
having  his  English  brain  area  destroyed,  was  driven  to 
Greek  for  everyday  communication. 

That  Jones  will  "pick  up"  Spanish  in  a  few  weeks 
is  a  very  long  chance — about  one  in  one  hundred.  If 
he  is  among  the  other  ninety-nine,  all  his  Spanish  must 
be  acquired  by  patient  grubbing,  and  then  he  may  be 
able  to  get  along  only  in  monosyllables,  with  waiters 
and  taxi  drivers. 

We  Americans  have  a  persistent  belief  that  Spanish 
is  an  easy  language.  And  so  it  is,  compared  to  Eng- 
lish, French  or  German,  because  each  vowel  has  its 
own  unvarying  sound,  and  nearly  all  the  consonants. 
Spanish  is  almost  scientific  in  its  rules,  and  practically 
free  from  non-Latin  words  and  roots.  But  the  blun- 
ders even  a  native  can  make  with  the  gender,  number, 


^TICKING  UP"  SPA:NriSH  203 

tense  and  person  of  even  the  Spanish  regular  verb — 
Ola! 

A  Yankee  finished  a  hearty  meal  in  a  Buenos  Aires 
restaurant,  and  put  his  elementary  Spanish  together  to 
ask  for  the  check.  Como  means  "how"  and  mucho 
means  "much." 

''Como  mucho  T'  he  asked  the  waiter. 

"Certainly,  senor,"  was  the  reply.  "Eat  all  you 
want." 

''Como  mucho  f*  he  repeated,  finishing  his  dessert, 
and  again  the  waiter  tried  to  assure  him  that  the  food 
was  there  to  be  eaten,  and  he  needn't  be  ashamed  of  a 
hearty  appetite.  For  the  word  como  also  means  "I 
eat,"  and  the  Yankee  was  really  saying,  "I  eat  a  great 
deal." 

A  companion  story  is  that  of  an  Argentine  pro- 
fessor, visiting  the  United  States,  who  learned  to  like 
ice  cream  before  he  mastered  English.  Going  to  the 
drag  store  one  evening  for  this  delicacy,  he  kept  re- 
peating, ''Hielo  (ice),  cold;  crema,  cream;  hielo,  cold; 
cremu,  cream."  And  what  he  finally  asked  for  was 
— cold  cream. 

If  we  can  drop  the  notion  that  any  foreign  language 
is  easily  picked  ap,  it  w^ill  be  most  beneficial  in  helping 
us  visualize  the  South  American  requirements.  It  is 
chiefly  a  notion  of  the  stay-at-home.  To  be  pushed 
off  into  the  deep  water  of  a  country  where  the  lan- 
guage .is  strange,  and  one  cannot  even  order  a  simple 
meal  or  ask  his  way  in  the  streets,  is  an  experience  that 
will  give  anybody  understanding  and  s^Tupathy  in  this 


204       BUSINESS  m  SOUTH  AMEEICA 

matter,  and  respect  for  the  difficulties  most  persons 
encounter  in  the  study  of  languages.^ 

Our  public  schools,  business  colleges  and  night 
classes  are  teaching  thousands  of  young  folks  what 
they  think  is  French,  Spanish,  Italian  and  whatnot. 
So  far  as  Spanish  is  concerned,  this  study  may  enable 
them  to  read  the  Spanish  American  newspapers,  but 
not  to  speak  fluently,  and  least  of  all  to  understand 
the  rapid  idiomatic  language  heard  on  all  sides. 
Practically  every  South  American  country  has  its  own 
variation  of  the  mother  tongue.  The  Argentino  with 
his  ^^cazzhay"  instead  of  ^'calyay'^  in  pronouncing 
words  like  "calle"  differs  from  the  Uruguayan  across 
the  river,  with  his  Basque  accent.  The  Chileans  have 
a  special  Spanish  of  their  own,  with  their  own 
Academy  to  supervise  it,  and  the  Limans  speak  the 
purest  Spanish  of  all,  yet  different  from  that  of  Spain. 

There  is  as  yet  a  lack  of  langTiage  books  dealing  with 


^  What  the  tyro 's  Spanish  or  Portuguese  looks  like  in  Buenos 
Aires  or  Eio  de  Janeiro  may  be  shown  by  an  example  of  a  tyro's 
English — the  only  letter  Napoleon  ever  wrote  tin  our  language, 
after  several  months'  study  at  St.  Helena,  in  middle  age.  It  haa 
one  characteristic  common  to  most  all  such  efforts,  that  of  clear- 
ness— Napoleon  does  not  write  English,  yet  there  is  no  doubt  about 
what  he  means: 

"Count  Lascases.  Since  sixt  wek  y  learn  the  english  and  y  do 
not  any  progress.  Sixt  week  do  fourty  and  two  day.  If  might 
have  learn  fivty  word,  for  day,  1  could  know  it  two  thous'ands 
and  two  hundred.  It  is  in  the  dictionary  more  of  foorty  thou- 
sand ;  even  he  could  most  twenty  ;*  bot  much  of  terns.  For  know 
it  or  hundred  and  twenty  week  which  do  more  two  years.  After 
this  you  shall  agree  that  the  study  of  one  tongue  is  a  great  labour 
who  it  must  do  into  the  young  aged. 

''Longwood,  this  morning,  the  seven  march  thursday  one  thou- 
sand eight  hundred  sixteen  after  nativity  the  yors  Jesus  Christ. 

"Count  Lascases,  chambellan  of  the  S.  M.,  Longwood;  into 
his  polac;   very  press." 


"PICKING  UP'^  SPANISH  205 

the  Spanish  of  Latin  America,  as  contrasted  with  that 
of  Spain.  Occasionally,  vocabulary  and  phrase  books 
deal  with  the  local  peculiarities  of  language  in  the  dif- 
ferent Spanish  American  countries,  each  of  which  has 
its  words  and  idiomatic  expressions.  Sometimes  these 
have  grown  out  of  Indian  languages,  and  again  are  due 
to  the  mixture  of  two  European  languages,  as  in  Argen- 
tina, where  Italian  population  and  influence  are  marked. 
The  best  work  of  the  kind  that  has  come  to  the  writer's 
attention  is  Tern/s  Short  Cut  to  Spanish  (Houghton, 
Mifflin  &  Co.,  Boston,  1020).  This  book  is  written 
chiefly  from  the  standpoint  of  Mexican  idiom,  and  is 
somewhat  optimistic  as  to  the  "easiness'^  of  learning 
Spanish.  It  deals  also  with  the  idioms  of  Argentina, 
Chile,  Peru,  Bolivia  and  the  Central  American  coun- 
tries. 

To  acquire  a  good  book  knowledge  of  Spanish 
usually  takes  months  of  hai'd  memorizing,  and  months 
more,  if  not  years,  of  everyday  life  in  a  Spanish  coun- 
try to  acquire  ease  in  the  idiom.  Many  Americans  living 
in  Spanish  countries  become  keen  students  of  the  com- 
plexities of  noun  and  verb,  which  are  inexhaustible. 

As  has  been  pointed  out  by  Professor  Frederick  B. 
Luquiens,  Spanish  instructor  at  Yale,  it  is  a  mistake 
for  Americans  to  study  Spanish  under  Spaniards,  as 
is  almost  invariably  done.  Students  fancy  that  the 
language  can  be  acquired  with  a  purer  accent  in  that 
way.  But  differences  in  accent  between  Spain  and 
Latin  America  are  not  important,  says  Professor 
Luquiens.  What  we  need  more  than  accent  is  ac- 
quaintance with  South  America's  spirit,  which  is  that 


206       BUSINESS  IN  SOUTH  AMEKICA 

of  a  young  country,  contrasted  with  Spain,  an  old 
country.  To  learn  the  Spanish  of  Spain  for  use  in 
South  America  is  equivalent  to  learning  English  in 
London  for  use  in  Chicago.  We  need  Spanish  not 
merely  for  business  purposes,  but  to  increase  our 
knowledge  of  South  America,  and  help  form  the  under- 
standing and  public  opinion  essential  to  both  conti- 
nents. For  this  reason  he  urges  that  teachers  be 
chosen  from  South  American  countries. 

For  the  salesman  and  resident  representative  on  the 
Southern  continent  Spanish  or  Portuguese  is  indis- 
pensable, and  a  good  command  of  the  language  at  that. 
Nothing  is  more  tiring  than  trying  to  carry  on  a  con- 
versation with  some  one  who  speaks  your  own  language 
haltingly,  blunderingly,  without  the  shorthand  of  idiom 
and  slang.  Where  two  thirds  of  one's  time  must  be 
devoted  to  guessing  what  the  other  fellow  means,  and 
trying  to  make  him  understand,  there  can  be  no  busi- 
ness communication,  and  the  South  American  very 
wisely  avoids  such  a  visitor  after  giving  him  one  or 
two  free  language  lessons. 

Yet  many  Americans  do  business  on  the  Southern 
continent,  and  do  it  well,  without  a  word  of  Spanish 
or  Portuguese — or  keeping  the  few  words  they  know 
strictly  for  waiters.  These  men  are  executives,  how- 
ever. They  are  not  selling  goods  or  adjusting  com- 
plaints, but  making  broad  investigations  and  recom- 
mendations in  basic  conditions.  Laying  the  foundation 
of  business,  upon  which  representatives  and  salesmen 
will  build  lat^r,  their  transactions  are  with  govern- 
ment   officials,    local    authorities,    heads    of    business 


'TICKING  UP"  SPAINTISH  207 

concerns  and  principals  generally.  Usually  they  have 
the  benefit  of  interpretation  through  their  own  repre- 
sentatives in  the  different  countries,  and  their  promi- 
nence and  individuality  assure  a  courteous  waiving  of 
language. 

This  brings  up  the  subject  of  interpreters. 

The  notion  that  some  one  who  speaks  both  lan- 
guages can  always  be  found  to  translate  conversation 
is  prevalent  among  Americans — and  mischievous,  as  a 
little  experience  of  hired  interpreters  will  demonstrate. 
The  hired  interpreter  is  always  available  for  a  few 
dollars  a  day,  and  often  an  intelligent  fellow,  eager  to 
earn  his  money.  More  than  that,  if  he  likes  his  client, 
or  finds  the  work  interesting,  he  may  forget  money, 
and  it  will  be  hard  to  make  him  take  his  wages. 

He  knows  helpful  little  temperamental  things. 

"The  man  we  are  now  going  to  see,"  he  coaches  you 
beforehand,  "is  very  able,  but  very  vain.  After  I  in- 
troduce you,  say  that  you  have  heard  of  him  in  the 
United  States." 

And  if  you  forget  to  say  this,  he  will  be  sure  to  say 
it  for  you,  and  wrap  it  up  in  the  flowers  of  Latin 
felicitation.  He  knows  everybody,  and  pushes  past 
subordinates  to  principals.  He  provides  you  with  a 
setting,  as  a  distinguished  visitor  from  I^orth  America, 
who  is  going  to  do  much  for  el  pais  (the  country)  — 
that  is,  if  he  knows  his  business. 

But  there  are  factors  out  of  his  control. 

For  example,  after  three  days  of  preliminary  cour- 
tesies, you  finally  enter  the  private  office  of  a  South 
American    notable    who    can    further    your    mission. 


208       BUSINESS  IN  SOUTH  AMEKICA 

The  compliments  are  passed,  not  forgetting  the  one 
about  his  fame  having  reached  your  own  restless 
pai^.  Through  the  interpreter  you  ask  a  question, 
or  make  a  statement.  Eagerly  the  South  American 
begins  to  talk.  You  watch  his  face,  smiling,  giving 
a  perfect  imitation  of  comprehension,  though  you  do 
not  understand  a  word.  A  dozen  sentences  would 
tell  what  you  want  to  know.  He  talks  on  and  on. 
It  takes  both  the  interpreter  and  yourself  to  stop  him, 

and  then  the  interpreter  turns  to  you.    ''He  says^ !" 

and  endeavors  to  condense  the  long  harangue  so  that 
you  get  its  substance.  Another  question  starts  him  off 
again,  and  you  soon  see  that  the  conversation  has  really 
given  him  an  opportunity  to  make  a  speech.  Some- 
times you  find  yourself  making  speeches,  as  interesting 
phases  of  a  subject  crop  up  in  your  mind,  and  you  for- 
get that  one  of  the  smiling  listeners  cannot  understand 
a  word  you  say. 

Now,  your  talk  may  be  technical.  The  interpreter 
understands  Spanish  and  English,  but  is  wholly  un- 
acquainted with  the  technical  aspects.  If  you  are 
working  through  your  own  branch  representative,  as 
interpreter,  he  would  make  the  technicalities  clear  in 
both  languages.  He  could  listen  to  a  long  speech  by 
the  South  American  and  give  you  the  gist  of  it  that 
night  at  dinner.  But  the  hired  interpreter  is  obviously 
handicapped  in  these  respects. 

When  technical  matters  are  left  to  a  hired  interpreter 
serious  errors  are  bound  to  occur.  Details  are  mis- 
translated, terms  misunderstood.  It  is  like  doing  busi- 
ness with  a  deaf  mute.     Misinterpretation  of  a  single 


"PICKING  UP'^  SPANISH  209 

technical  word  in  a  contract  has  cost  many  thousands 
of  dollars  in  cases  where  business  was  done  this  way. 

For  the  salesman,  good  command  of  the  other  fel- 
low's language  is  absolutely  indispensable,  and  selec- 
tions should  be  made  from  the  large  number  of  Ameri- 
cans with  experience  in  South  America  or  our  Spanish- 
speaking  dependencies,  or  among  the  many  Spanish 
Americans.  Some  prejudice  exists  against  the  latter 
because,  being  chosen  chiefly  for  their  knowledge  of 
Spanish,  but  not  trained  salesmen,  they  have  not  done 
well  in  the  Spanish  American  field.  But  that  can  be 
overcome  by  training  good  men  in  the  United  States 
before  sending  them  out,  and  there  is  also  a  class  of 
what  might  be  called  "Spanish  North  Americans"  who 
have  added  American  business  training  to  Spanish 
American  birth. 

One  may  be  unable  to  speak  the  other  fellow's  lan- 
guage, yet  be  linguistically  simpatico.  Our  Govern- 
ment some  years  ago  sent  an  instructor  to  one  of  the 
South  American  countries.  The  man  chosen  was  con- 
stantly complaining  of  the  people  and  the  life.  After 
more  than  a  year  among  them  he  knew  hardly  a  word 
of  the  language.  He  is  an  excellent  illustration  of  the 
wrong  viewpoint.  The  right  viewpoint  is  to  like  the 
people,  or  at  least  learn  enough  of  their  language  to 
catch  the  drift  of  headlines  in  the  newspapers,  and  be 
able  to  read  a  letter — these  are  matters  of  studying  the 
dictionary,  and  do  not  involve  training  the  ear  and 
vocal  organs. 

If  the  visitor  is  able  even  to  read  a  little  Spanish  it 
helps  in  many  ways.     For  example,  he  can  correspond 


210       BUSmESS  IN  SOUTH  AMEKICA 

with  an  Argentino  or  Chileno,  reading  their  letters  in 
Spanish  and  answering  in  English  that  can  be  under- 
stood by  them  through  similarity  to  Spanish.  Our 
language  is  a  grab-bag  of  every  language  on  earth,  and 
rich  in  Latin  roots.  By  choosing  Latin  words,  the 
meaning  can  be  made  clear  to  a  Spanish-speaking  per- 
son who  knows  no  English.  Eor  example,  instead  of 
using  Anglo-Saxon  words  to  say  ^'Your  welcome  letter 
is  at  hand,''  words  similar  to  Spanish  may  be  used,  as 
"Your  amiable  communication  received.''  Thus,  out 
of  four  words,  three  approximate  the  Spanish — amable, 
comurdcacion,  recihir.  There  are  many  words  syn- 
onymous in  both  languages,  usually  different  in  pro- 
nunciation, but  practically  alike  to  the  eye:  attention, 
atencion;  condition,  condicion;  different,  diferente; 
diligent,  diligente;  future,  futuro:  extreme,  extremo; 
imperfect,  imperfedo;  interesting,  interesdnte;  per- 
son, persona;  present,  presente;  repeat,  repetir;  nation, 
naciSn;  famous,  famoso.  Selecting  such  words  in  cor- 
respondence is  not  only  a  courteous  way  of  making 
one's  self  clear,  but  an  excellent  drill  in  language. 

Probably  three  Americans  in  four  have  still  to  learn 
that  the  Brazilians  speak  Portuguese.  In  the  wide  sub- 
stitution of  Spanish  for  German  in  our  schools  and 
colleges,  students  have  been  assured  that  this  language 
will  be  useful  in  our  vdder  relations  with  Latin  Amer- 
ica. Hardly  any  Portuguese  courses  have  been  pro- 
vided, however,  and  even  such  all-knowing  persons  as 
our  college  presidents  have  been  astonished  when  as- 
sured that  Portuguese  is  the  language  of  forty  per 
cent  of  the  South  American  people. 


"PICKING  UP"  SPAOTSH  211 

It  is  often  assumed  that  Spanish  is  pretty  much  like 
Portuguese,  and  will  answer  every  purpose  in  Brazil, 
and  again,  that  the  Brazilians  all  speak  French.  Both 
assumptions  are  wrong.  The  educated  Brazilian  learns 
French  as  his  other  language,  and  it  is  also  spoken  in 
the  shops  in  the  principal  cities.  Back  in  the  country 
French  is  of  no  more  use  than  Choctaw.  The  Bra- 
zilian understands  Spanish,  but  even  Spaniards  may 
have  difficulties  in  understanding  Portuguese.  The 
use  of  Spanish  in  Brazil,  particularly  for  advertising 
matter,  catalogues  and  correspondence,  is  a  reflection 
upon  the  people  of  that  country,  who  feel  that  the 
concern  using  it  in  correspondence  or  printed  matter 
has  not  thought  Brazil  important  enough  to  acquire 
its  language.  Moreover,  there  is  still  a  certain  antago- 
nism between  Brazilians  and  their  Spanish-speaking 
neighbors,  arising  out  of  old  wai*s.  And  it  is  returned 
with  interest,  for  any  joke  about  a  Brazilian,  no  matter 
how  obvious,  is  certain  of  its  laugh  in  Argentina  or 
Uruguay. 

Portuguese  is  more  difficult  than  Spanish.  It  has 
more  vowel  and  consonant  sounds,  and  more  arbitrary 
pronunciation,  like  French.  Its  words  differ  radically 
from  Spanish  in  many  cases.  For  instance,  the  word 
^^no"  in  Spanish  means  the  same  thing  as  in  English, 
but  in  Portuguese  it  means  ^^in  the."  "Good  day"  is 
huenos  dias  in  Spanish  and  horn  dia  in  Portuguese. 
"Thanks  very  much"  is  muchas  gracias  in  Spanish 
and  in  Portuguese  muito  ohngado.  Portuguese  also 
has  more  words  from  other  langTiages,  echoes  of  world- 
wide exploration  by  Portuguese  navigators,  while  in 


212       BUSESTESS  IN  SOUTH  AMERICA 

Brazil  the  language  has  been  modified  by  Indian  words. 
With  a  speaking  knowledge  of  Spanish,  however, 
backed  by  diligent  study  and  practice,  the  average 
American  can  acquire  facility  in  Portuguese  in  from 
six  months  to  a  year.  Meanwhile  his  Spanish  will 
sei've  most  ends  and  the  Brazilians  will  be  tolerant  of 
him,  for  as  they  say  themselves,  ^^We  Brazilians  love 
fun,  and  will  laugh  at  anything  except  a  foreigner's 
mistakes  in  our  language."  As  in  the  Spanish-speak- 
ing countries,  by  far  the  greater  proportion  of  Amer- 
icans doing  business  in  Brazil,  either  as  resident  repre- 
sentatives or  travelers,  speak  the  language  of  the  coun- 
try, and  in  many  cases  speak  it  fluently. 


CHAPTER  XVI 

WHAT  CHANCE  FOR  ME  IN  SOUTH  AMERICA? 

"Like  any  country  town  at  home,  only  smaller,"  was 
the  verdict  of  a  disappointed  American  who  had  landed 
a  bank  job  in  a  South  American  republic.  Evidently 
he  had  anticipated  romance — dark-eyed  senoritas,  gui- 
tar-playing caballeros,  parrots,  monkeys. 

Yes,  perhaps  even  gold  in  the  streets. 

For  thousands  of  young  Americans  have  had  their 
thoughts  turned  toward  the  Southern  continent  the 
past  two  or  three  years,  and  regard  it  as  a  region  where 
money  is  easily  made  by  reason  of  its  fundamental 
riches,  or  where  life  will  be  picturesque  and  different. 
This  is  shown  by  inquiries  from  young  men: 

"Would  you  advise  me  to  try  and  better  myself  in 
South  America  ?"  they  ask,  in  substance.  "I  am  twen- 
ty-four years  old,  a  graduate  of  Downcreek  College, 
and  am  taking  Spanish  lessons.  What  line  of  business 
in  South  America  offers  the  best  opportunities  ?  What 
countries  do  you  recommend  ?  Any  assistance  you  can 
give  me  in  securing  a  position  there,  or  names  of  peo- 
ple to  whom  I  can  apply,  will  be  highly  appreciated." 

It  is  not  a  simple  matter  to  answer  such  inquiries 
for  in  South  America  everything  depends.  Every  one 
of  the  ten  republics  is  fundamentally  rich,  and  people 

213 


214       BUSmESS  IN  SOUTH  AMEEICA 

are  constantly  finding  opportunities  in  them.  But  it 
is  safe  to  say  that,  for  every  opportunity  in  South 
America  our  own  country  offers  fifty,  and  for  every 
dollar  of  easy  riches  there  are  a  few  more  dollars  in 
the  United  States. 

The  inquiries  come  chiefly  from  youngsters  who  have 
lately  finished  school,  and  are  starting  out  in  life.  In- 
variably they  seek  a  job,  because  salary  or  wages  are 
necessary,  and  they  have  as  yet  no  plans  for  business 
on  their  own  account. 

l^ow,  South  America  is  one  of  the  last  places  in  the 
world  for  them,  viewed  from  this  standpoint.  Its  in- 
dustrial and  commercial  life  is  as  yet  slenderly  devel- 
oped beside  our  own.  Its  ready-made  jobs  in  office, 
factory  and  warehouse  are  few,  not  very  well  paid,  and 
the  Yankee  going  there  blindly  to  seek  employment 
would  encounter  all  the  difficulties  of  language  and  a 
strange  atmosphere,  plus  the  competition  of  the  thou- 
sands of  South  Americans  crowding  into  the  cities,  as 
well  as  the  job  hunters  constantly  coming  from  the 
poorest  countries  of  Europe. 

The  place  to  begin  hunting  a  South  American  job 
is  at  homo.  Eive  years  ago  such  a  quest  would  havQ 
been  fantastic,  but  to-day  there  are  many  branches  of 
American  business  concerns  on  the  Southern  continent. 
With  hardly  any  exception  they  recruit  American  em- 
ployees in  the  United  States.  The  list  includes  Ameri- 
can branch  banks,  meat  packing  companies,  shipping, 
exporting,  importing  and  manufacturing  concerns.  In 
most  cases  two-thirds  of  their  employees  on  the  South- 
ern continent  are  Latin  Americans,  but  every  ship  car- 


CHANCE  m  SOUTH  AMERICA         215 

ries  employees  from  this  country.  Tliese  are  managers, 
superintendents,  accountants,  salesmen,  technical  ex- 
perts and  specialists,  for  the  most  part  chosen  from 
the  home  organization  because  they  have  some  particu- 
lar ability  or  experience.  But  there  are  also  consider- 
able numbers  of  young  men,  and  also  women,  sent  to 
fill  subordinate  positions  as  secretaries,  stenographers, 
bookkeepers,  foremen  and  assistants  generally.  The 
American  business  colonies  in  several  of  the  largest 
South  American  capitals  have  been  growing  so  fast 
lately  that  stenographers  and  office  employees  familiar 
with  American  methods  are  sometimes  obtained  with 
difficulty,  and  the  American  job  hunter  with  experi- 
ence in  those  lines  might  find  a  position  waiting  him 
when  he  landed  in  Rio  de  Janeiro  or  Buenos  Aires. 
The  expansion  of  our  business  in  South  America  has 
also  made  openings  for  other  persons  with  special  skill, 
such  as  compositors  and  proofreaders  who  can  step 
into  a  printing  office  where  nobody  understands  Eng- 
lish, and  produce  advertising  material  in  the  American 
language,  and  wdth  American  character.  But  to  take 
ship  for  South  America  on  the  chance  of  securing  such 
positions  after  arrival  is  not  to  be  recommended — it 
is  altogether  too  long  a  shot. 

After  he  has  landed  a  job,  and  arrived  in  South 
America,  the  Yankee  is  often  dissatisfied  with  it,  and 
with  the  country  to  which  he  has  been  sent.  If  he  has 
a  wife,  dissatisfaction  is  often  intensified.  The  young 
Britisher,  German,  Italian,  Spaniard  and  Portuguese 
set  out  for  South  America  with  the  intention  of  staying 
twenty  or  thirty  years,  if  not  permanently.     Coming 


216       BUSINESS  IN  SOUTH  AMEKICA 

from  countries  more  crowded  than  ours,  where  oppor- 
tunities are  not  so  plentiful,  they  find  better  chances 
to  rise  in  the  world.  Moreover,  they  find  large  colo- 
nies of  their  countrymen;  so  that  even  the  Britisher 
can  enjoy  his  sports  and  hobbies.  But  the  American 
colonies  are  still  small,  and  loneliness,  especially  for 
women,  turns  thoughts  back  to  "God's  country"  breed- 
ing comparisons  that  often  lead  to  an  almost  morbid 
dissatisfaction. 

Of  course,  there  are  exceptional  Americans  who 
thrive  in  Latin  countries,  and  prefer  them  to  the  United 
States.  Some  are  of  Latin  descent  and  find  themselves 
thoroughly  at  home.  Others  have  lived  for  years  in 
Latin  countries — Mexico,  Porto  Kico,  Cuba,  the  Philip- 
pines. Still  others  catch  the  drift  of  Latin  American 
life,  really  master  the  language,  and  make  a  place  for 
themselves  in  the  society  and  affairs  of  the  country. 
Unfortunately,  there  are  not  as  many  of  these  excep- 
tional people  as  we  need  for  the  management  of  our 
South  American  trade,  and  the  average  American  re- 
gards his  stay  as  exile. 

But  even  two  or  three  years'  exile  in  South  America 
may  be  worth  while  if  one  has  interesting  work  and 
regards  it  as  training  and  experience. 

One  type  of  bank  employe©  sent  South  looks  at  the 
salary  he  is  paid,  contrasting  it  with  the  cost  of  living, 
which  is  fifty  to  one  hundred  per  cent  higher  than  at 
home.  But  another  bank  man  appreciates  the  oppor- 
tunity to  learn  technicalities  not  common  in  everyday 
banking  at  home — foreign  exchange,  accounting  in  half 
a  dozen  different  currencies,  £nancing  import  and  ex- 


CHAXCE  IX  SOUTH  AMERICA         217 

port  business,  the  mechanism  and  advantages  of  branch 
banking.  Similar  opportunities  are  found  for  learning 
the  technicalities  of  shipping,  marine  insurance,  in- 
vestments, tariffs,  customs  methods,  selling  manufac- 
tured goods,  buying  raw  materials,  keeping  track  of 
credit  information,  becoming  familiar  with  Latin 
American  law  and  business  customs. 

A  good  streak  of  romance  and  a  sure-fire  sense  of 
humor  are  essential  in  the  American  going  to  the  South- 
ern continent.  Evervbody  sets  out  romantically,  of 
course — the  very  prospect  of  travel,  and  the  strange- 
ness of  new  countries,  carry  one  buoyantly  for  a  few 
weeks.  But,  unfortunately,  nine  persons  in  ten  lose 
this  fresh  interest  when  thev  discover  that  even  in 
South  America  one  cannot  escape  a  certain  amount  of 
daily  gi-ind,  or  elude  the  butcher  or  landlord.  The  first 
few  weeks'  enjo^^nent  of  people  and  ways  that  are  dif- 
ferent, because  they  are  different,  is  followed  by  pes- 
simistic comparisons  with  people  and  ways  at  home. 
Everything  at  home  takes  on  a  halo  of  perfection,  and 
everything  in  one's  South  American  surroundings  is 
absolutely  wrong  just  because  it  is  different.  Without 
a  fast-color  streak  of  romance  and  the  detachment  that 
enables  one  to  laugh,  presently  there  are  little  cliques 
of  self-pitying  exiles,  whispering  awful  things  about 
^'these  people'' — the  natives  of  the  country.  This  is 
characteristic  of  the  busine^^s  colonists  everywhere. 
American  cliques  do  it  in  London  and  Hongkong, 
Britons  in  Xew  York  and  Petrograd,  Frenchmen, 
Germans,  Italians,  everybody — of  a  kind.  But  it  is 
simply  another  form  of  provincialism,  and  as  one  goes 


218       BUSINESS  m  SOUTH  AMERICA 

abroad  to  understand  and  enjoy  countries  and  people 
different  from  his  own,  the  cure  is  cosmopolitanism. 
Fortunately,  there  are  always  true  men  and  women  of 
the  world  outside  the  circles  of  the  exiles  who  have 
"dug  in,"  and  it  is  worth  while  finding  and  cultivating 
them  as  friends. 

Another  angle  to  this  subject  is  the  selection  by 
American  business  concerns  of  suitable  representatives 
and  employees  for  service  in  South  America. 

Viewed  from  the  Southern  continent,  the  selections 
are  not  always  wise.  Choice  is  governed  chiefly  by 
ability  at  home.  Jones  is  picked  from  the  plant  or- 
ganization because  he  knows  better  than  anybody  else 
how  to  get  production  in  a  certain  line.  But  Jones  has 
a  wife.  He  is  middle^-aged,  comfortable  without  his 
salary  because  he  receives  royalties  from  patents,  loves 
his  home  in  the  suburbs  better  than  anything  else.  Mrs. 
Jones  must  either  stay  at  home  and  be  worried  and 
lonesome,  or  go  to  South  America,  lose  all  her  friends, 
and  be  worried  and  lonesome,  too.  Jones  doesn^t  un- 
derstand Spanish,  makes  no  South  American  friends, 
doesn't  like  the  people  or  the  countries,  and  frankly 
says  so.  They  send  him  around  from  place  to  place — 
La  Plata  to  Montevideo — to  Asuncion — to  Sao  Paulo 
— to  Rio  Grande  do  Sul  by  the  craziest  jerkwater  rail- 
road he  ever  saw.  Jones  loses  his  grip  on  production. 
Production  is  not  a  matter  of  machinery  alone.  The 
human  element  enters  in.  At  home  Jones  understands 
the  human  element.  But  here  he  cannot  put  his  finger 
on  it  because  there  is  a  gap  of  language  and  tempera- 
ment. 


CHAXCE  1:^"  SOUTH  AMERICA         219 

Again,  Jones  may  be  all  riglit,  but  his  wife  all  wrong. 
Our  executives  at  home  have  a  blithe  way  of  ordering 
subordinates  to  South  America,  taking  wives  and  fami- 
lies for  gTanted.  About  one  American  woman  in 
twenty  really  likes  South  America  to  live  in  and  make 
friends  and  a  place  for  herself,  and  in  some  cases  that 
type  of  woman  has  needed  a  trip  to  the  United  States, 
after  several  years  on  the  Southern  continent,  to  find 
out  that  she  did  like  it  after  all.  Almost  without  ex- 
ception, the  American  women  compelled  to  live  in  South 
America  miss  their  relatives,  their  friends,  their  com- 
fortable and  pretty  things.  Where  there  are  children 
educational  difficulties  arise.  Of  course,  not  every 
American  woman  complains.  The  food  and  servants 
may  be  different,  the  apartment  chilly,  the  American 
colony  gossipy,  and  she  wants  to  go  home.  But  there  is 
a  certain  kind  of  American  woman  who  says  little,  mak- 
ing the  best  of  the  situation,  letting  her  husband  work 
in  peace,  and  helping  him.  Unfortunately,  there  are 
others  who  gi'umble  ceaselessly,  and  add  to  the  per- 
plexities of  the  men  sent  to  handle  important  business 
matters.  And  this  is  so  much  a  factor  in  the  efficiency 
of  men  sent  to  South  America  that  wife  and  family 
should  by  all  means  be  taken  into  account  when  selec- 
tions are  made. 

When  we  have  been  a  few  years  longer  in  world  trade 
there  will  undoubtedly  be  more  Americans  available  for 
work  in  other  countries — men  and  women  who  have  dis- 
covered that  they  like  life  abroad  and  who  have  made 
homes  and  friends  there.    There  are  Americans  of  that 


220       BUSmESS  IlSr  SOUTH  AMEKICA 

sort  already  on  the  Southern  continent,  bnt  probably 
each  represents  at  least  one  hundred  who  have  gone  home 
dissatisfied.  World  trade  calls  for  world  citizens.  The 
British  and  European  industrial  nations  have  developed 
such  citizens.  We  are  going  through  the  process  of  se- 
lection, and  it  is  costly,  tedious  and  irritating.  At  a 
rough  guess,  each  American  who  remains  more  than  a 
year  in  our  branch  banking  organization  on  the  South- 
ern continent  is  one  in  twenty,  others  having  left  because 
they  were  homesick,  did  not  consider  salaries  adequate 
in  the  expensive  Latin  Eepublics,  did  not  like  the  for- 
eign atmosphere,  or  believed  that  better  opportunities 
existed  at  home.  But  the  one  man  or  woman  out  of 
the  twenty  is  usually  a  prize,  finding  the  work  and  the 
life  full  of  interest  and  possibilities.  In  other  extensive 
American  organizations,  such  as  the  packing  houses, 
it  is  frankly  recognized  that  most  Americans  do  not 
like  to  live  abroad  for  long  periods,  and  employees  are, 
therefore,  sent  out  for  definite  contract  terms,  averaging 
three  years,  wdth  extra  compensation  to  cover  increased 
living  expenses.  But  here,  too,  there  are  men  and 
women  who  like  South  America,  and  so  there  is  grad- 
ually emerging  a  class  of  Americans  who  will  stick. 
Meanwhile,  for  the  executive  building  of  a  South  Ameri- 
can organization,  it  is  cut  and  try,  cut  and  try  again. 
The  cutting  and  trying  should  be  done  in  the  United 
States,  as  far  as  possible,  avoiding  the  cost  and  dis- 
appointment of  the  long  trip  south  and  the  speedy  re- 
turn of  the  employee  who  does  not  fit. 

Some  of  the  Americans  roving  over  the  Southern  con- 
tinent are,  to  put  it  mildly,  not  representative  of  our 


CHANGE  IN  SOUTH  A^IERICA         221 

country.  An  extreme  instance  is  the  lady  who  applied 
for  employment  to  Ambassador  Morgan,  in  Brazil,  stat- 
ing that  she  was  a  countrywoman  of  his,  could  do  a 
^'turn"  with  snakes,  and  was  tattooed  all  over. 

In  contrast,  another  class  of  Americans  should  be 
seen  oftencr  in  the  Latin  Republics — principals  and 
executives  representative  of  x\merican  business  at  its 
best.  Thus  far,  the  tendency  has  been  to  send  the  sales- 
man, resident  agent,  auditor  and  engineer.  South 
America  needs  more  than  merchandise.  It  has  its  big 
problems — the  development  of  resources,  financing  of 
enterprises,  and  building  solid  foundations  for  its  fu- 
ture. It  needs  acquaintance,  public  opinion,  business 
friends.  It  wants  to  see  and  talk  with  i^merican  cap- 
tains of  industry,  and  the  latter  should  know  South 
America  and  its  peoples  at  first  hand,  so  they  may  plan 
and  direct  with  confidence  and  imagination.  South 
America  is  not  a  business  side  issue  for  us,  but  a  field 
of  permanent  activity.  We  should  build  there  as  though 
it  were  an  undeveloped  section  of  our  own  country. 
And  it  must  be  remembered  that  in  doing  so  w^e  are 
pitted  against  principals  from  older  industrial  coun- 
tries. 

The  cost  of  such  a  trip  is  to  be  figured  in  time  rather 
than  money.  It  comes  a  little  high,  for  at  least  three 
months  should  be  given  to  a  circuit  of  the  continent. 
But  it  is  a  splendid  personal  investment.  The  most 
agreeable  route  in  the  opinion  of  many  travelers  is  by 
way  of  the  West  Coast,  through  Panama.  The  West 
Coast  countries  are  less  populous  than  those  of  the  East 
Coast,   not  so  well   developed,  nor   so   comfortable  in 


222        BUSINESS  m  SOUTH  AMEEICA 

the  matter  of  hotels  and  transportation.  Beginning 
with  Panama,  everything  will  be  new  and  interesting, 
and  the  material  shortcomings  lost  sight  of.  When 
the  East  Coast  is  reached  the  contrast  will  be  pleasant 
and  informing. 

Ronghlj,  such  a  trip  would  require  two  weeks  from 
l^ew  York  to  Lima,  stopping  over  two  or  three  days  in 
Panama ;  one  week  in  Peru ;  two  weeks  for  the  voyage 
to  Valparaiso,  a  stay  in  Chile  and  the  trip  to  Buenos 
Aires;  two  weeks  for  Argentina  and  Uruguay;  three 
weeks  for  the  voyage  to  Bio  de  Janeiro  and  a  stay  in 
Brazil ;  three  weeks  for  the  voyage  to  the  United  States. 
This  aggregate  of  three  months  will  enable  the  traveler 
to  see  little  more  than  the  business  side  of  South  Amer- 
ica and  its  city  life,  for  it  must  be  confined  chiefly  to 
the  seaports  for  lack  of  time.  In  each  country,  how- 
ever, the  route  may  include  trips  through  the  interior. 
In  Peru,  there  will  be  a  side  trip  to  the  Andean  high- 
lands, and  something  will  be  seen  of  Peruvian  and 
Chilean  port  towns  at  which  the  steamer  stops  en  route 
to  Valparaiso.  If  Peruvian  or  Chilean  coastwise  steam- 
ers are  taken  for  this  voyage,  so  much  the  better.  One 
should  not  be  frightened  by  stories  about  the  inferiority 
of  these  ships — ^that  is  largely  competitive  steamship 
propaganda,  and  they  are  really  first-rate,  and  the  trav- 
eler is  in  South  America  while  on  them.  Something  of 
Chile  can  be  seen  by  taking  a  railroad  trip  south  from 
Santiago  to  the  central  farming  zone,  and  something 
of  Argentina  by  crossing  the  Andes  to  Mendoza  and 
thence  to  Buenos  Aires  by  train,  or  taking  the  lake 
route  through  southern   Chile  to  Bahia  Blanca,   and 


CHANCE  IX  SOUTH  AMEEICA         223 

from  there  to  Buenos  Aires.  A  week-end  trip  to  an 
estancia  in  Buenos  Aires  Province  gives  an  excellent 
idea  of  the  pampas,  and  Argentina's  sources  of  pros- 
perity in  livestock  and  grain  farming.  Uruguay  is 
reached  by  night  boat  from  Buenos  Aires  to  ]\rontevideo. 
This  trip  can  be  taken  two  or  three  days  before  one's 
steamer  for  Rio  de  Janeiro  puts  in  at  Montevideo.  A 
day's  motor  or  railroad  ride  through  Uiniguay  will  im- 
part the  character  of  that  sturdy  little  country.  Rio 
de  Janeiro  can  be  reached  by  train  from  Montevideo 
instead  of  boat,  a  trip  somewhat  longer  and  rougher,  but 
taking  one  through  a  representative  section  of  South 
America,  with  a  stopover  at  Sao  Paulo,  the  largest 
industrial  and  railroad  center  on  the  continent,  a  night's 
ride  from  Bio  de  Janeiro.  There  will  be  no  opportu- 
nity to  visit  the  Amazon  country  on  such  a  short  sched- 
ule but  a  side  trip  or  two  can  be  made  to  Brazilian  coffee 
plantations,  or  fazendas.  Two  or  three  weeks  lengthen- 
ing of  the  schedule  make  it  possible  to  visit  northern 
ports  like  Bahia,  Pernambuco  and  Ceara,  winding  up 
at  the  mouth  of  the  Amazon,  where  steamers  can  be 
taken  for  I^ew  York.  This  involves  roughing  it  in 
Brazilian  coastwise  ships,  which  are  rated  as  only  '^tol- 
erable." 


CHAPTER  XVII 

WHAT   YOU  WILL  NEED   IN   SOUTH   AMERICA 

Have  jou  ever  met  a  Legal  Nobody? 

The  place  to  find  him  is  South  America,  usually  the 
hotels  of  the  East  Coast  where  Americans  gather.  He 
is  almost  infallibly  an  American,  a  salesman  or  busi- 
ness man,  and  pretty  certain  to  be  a  good  one.  He 
speaks  the  language  of  the  country,  makes  friends  with 
the  Latin  Americans,  who  like  him,  and  has  goods  that 
they  want,  and  are  ordering.  His  work  in  that  par- 
ticular country  has  been  successful,  and  is  finished,  and 
he  is  anxious  to  go  on  to  another  field. 

But  he  doesn't  go. 

Days  pass  into  weeks,  and  sometimes  months.  He 
was  scheduled  to  leave  in  September  he  tells  you,  but 
must  now  wait  until  October.  October  finds  him  wait- 
ing for  November,  and  in  ISTovember  he  hopes  to  get 
away  by  Christmas.  His  days  are  passed  in  watching 
the  cable  offices  and  the  mails,  and  his  nights  in  the 
company  of  Latin  American  friends  who  try  to  make 
him  forget  his  troubles. 

^'If  you  were  starting  for  South  America  again,"  you 
ask  him,  "what  would  you  secure  first  ?" 

'^A  power  of  attorney !"  he  replies,  emphatically.   "A 

224 


I^EEDS  IN  SOUTH  AMERICA  225 

power  of  attorney  to  do  business,  sign  papers,  make 
contracts,  and  even  steal,  if  necessary!" 

In  the  books  dealing  with  South  America  you  will 
find  suggestions  about  what  to  take  in  the  way  of  cloth- 
ing, samples  and  letters  of  credit,  and  what  to  expect 
in  the  way  of  customs  duties,  license  fees,  and  so  on. 
The  power  of  attorney  may  be  mentioned  in  the  list, 
but  not  emphasized.  So,  hardly  one  American  in  ten 
pays  any  attention  to  this  item,  and  as  a  consequence 
South  America  has  a  lai'ge  transient  population  of 
Yankees  trying  to  do  business  without  being  able  to 
prove  their  identity  and  authority. 

The  samples  are  sho\vn,  the  terms  arranged,  the  or- 
der has  been  taken,  and  the  contract  is  ready  to  sign. 
The  Latin  American  purchaser  is  in  his  own  home  town, 
his  signature  officially  registered,  his  identity  and  re- 
sponsibility legally  established.  The  American  sales- 
man or  executive  is  five  thousand  miles  from  home, 
doing  business  under  a  strange  legal  code,  and  must 
furnish  court  proof  that  he  is  what  he  claims  to  be. 

^'Under  this  contract,  senhor,"  says  the  Rio  de  Ja- 
neiro attorney,  '^you  act  for  the  Consolidated  Products 
Corporation,  of  New  York.  What  is  your  connection 
with  that  corporation  ?" 

^'I  am  sales  director  for  South  America." 

"You  are  able  to  prove  this,  of  course." 

"I  have  letters  from  our  home  office." 

''But  these  are  not  proof  under  Brazilian  law,"  says 
the  attorney,  after  glancing  them  over.  ''Your  identity 
is  not  established,  though  personally  I  do  not  question 
your  truthfulness.     Even  if  these  letters  proved  your 


226       BUSINESS  m  SOUTH  AMEEICA 

connection  with  your  company  they  do  not  empower 
you  to  enter  into  contracts  for  that  company.  I^o  con- 
tract that  you  sign,  senhor,  would  he  binding  upon  your 
principals.  That  would  he  unfair  to  our  friend  here, 
your  patron  and  my  client.  Every  step  must  be  legal- 
ized for  his  protection."        * 

'No  American  business  man  visiting  the  Latin  repub- 
lics, whether  he  be  salesman,  resident  agent,  buyer  or 
whatnot,  should  be  without  a  power  of  attorney,  drawn 
up  with  broad  scope  and  explicit  detail. 

This  matter  is  so  important  that  the  American  Cham- 
ber of  Commerce  for  Brazil  has  published  a  pamphlet 
about  it,  prepared  by  Dr.  Richard  P.  Momsen,  an 
American  attorney  practicing  in  Bio  de  Janeiro. 

To  begin  with,  the  power  of  attorney  can  be  written 
in  English  instead  of  the  Spanish  or  Portuguese  that 
is  often  attempted  in  the  United  States.  That  makes 
it  clear  and  comprehensive,  because  in  the  language  of 
the  attorney  who  draws  it  up,  and  it  will  be  turned 
into  Spanish  or  Portuguese  on  the  Southern  continent 
by  offi3ial  translators  whose  version  alone  is  accepted 
in  the  courts.  It  must  be  certified  by  the  consul  of  the 
^  country  to  be  visited.  Some  authorities  recommend 
for  several  countries  a  single  power  of  attorney  signed 
by  a  court  of  record  in  the  United  States,  as  well  as 
the  Secretary  of  State  of  the  United  States.  Dr.  Mom- 
sen  recommends  separate  powers  of  attorney  for  each 
country  to  be  visited,  simply  certified  by  their  consuls 
in  the  United  States.  The  nearest  consul  will  give 
this  endorsement — it  is  not  necessary  to  send  to  Wash- 
ington. 


NEEDS  I:N'  south  AMERICA  227 

Eurther  suggestions  by  Dr.  Momsen  are  based 
on  Brazilian  law,  but  can  be  taken  as  a  guide  for  the 
Spanish-speaking   countries: 

A  telegraphed  power  of  attorney  is  not  recognized  in 
Brazilian  courts.  Powers  must  be  detailed  and  broad, 
because  Brazilian  law  interprets  them  in  the  narrowest 
terms.  Among  some  thirty  kinds  of  authority  likely 
to  be  needed  by  an  American  doing  business  in  Brazil 
are :  Power  to  sell,  give  away,  and  by  other  means  alien- 
ate property;  to  mortgage  proi)erty;  to  admit  and 
settle  debts;  give  receipts  and  releases;  draw  and  en- 
dorse and  accept  bills  of  exchange;  transfer  bonds  of 
public  debt;  issue  and  endorse  and  guarantee  promis- 
sory notes;  appoint  arbitrators  and  accept  their  deci- 
sions ;  name  and  appoint  attorneys,  representatives  and 
substitutes,  without  which  legal  proceedings  cannot  be 
instituted  in  the  Brazilian  courts;  organize  corpora- 
tions; vote  at  stockholders'  meetings  of  corporations; 
make  declarations  under  oath;  accept  or  contest  lega- 
cies ;  test  the  capacity  of  judges  in  court.  Under  cer- 
tain circumstances  a  power  of  attorney  should  even 
cover  the  right  to  contract  marriage  or  accept  a  public 

office. 

In  some  circumstances  transactions  can  be  legalized 
by  other  documents.  In  Brazil,  for  example,  the  pres- 
ident of  an  American  corporation,  entering  into  con- 
tracts, might  prove  his  identity  and  authority  by  a  cer- 
tified copy  of  the  meeting  of  his  corporation  directors 
at  which  he  was  elected  to  office,  backed  by  a  certified 
extract  from  the  by-laws  indicating  the  scope  of  his 
authority  as  president.    But  the  specially  drawn  power 


228       BUSINESS  IN  SOUTH  AMEEICA 

of  attorney  meets  every  purpose  better  than  sucli  make^ 
shift  documents. 

It  seems  an  odd  thing  that  Americans  setting  out 
for  the  Southern  continent  should  find  it  difficult  to  get 
practical  information  about  what  to  take  with  them 
for  business  facility  and  personal  comfort.  Yet  many 
traveling  on  the  Southern  continent  complain  that  the 
books  and  bureaus  consulted  for  guidance  in  these  mat- 
ters were  vague,  sending  them  to  Pern  with  raincoats, 
and  Argentina  without  overcoats. 

An  American  technical  journalist,  departing  for  the 
nitrate  fields  of  Chile,  was  given  a  folding  cane  um- 
brella as  a  farewell  gift.  Showers  are  about  thirty 
years  apart  in  those  regions.  If  there  were  rains,  there 
would  be  no  nitrate — it  would  all  have  been  washed 
away  long  ago.  A  fascinated  Chilean  to  whom  he 
showed  it  one  day  in  the  plaza  at  Antofagasta  offered 
him  two  hundred  and  fifty  pesos  for  the  curiosity. 

A  trip  to  the  half  dozen  leading  countries  of  South 
America  calls  for  practically  everything  needed  through- 
out the  year  in  New  York,  from  overcoats  and  furs  to 
pongee  suits  and  a  straw  hat.  First  there  is  a  stretch 
of  latitude  running  from  the  equator  to  Buenos  Aires, 
thirty-five  degrees  south,  corresponding  to  Charleston, 
S.  C.  Then  the  seasons  are  reversed,  winter  in  June 
and  summer  in  December.  On  top  of  that,  two  miles 
of  altitude  in  the  Andes.  And  finally,  coal  at  twenty 
to  fifty  dollars  a  ton.  A  raincoat  is  not  altogether  a 
joke  in  Lima,  where  the  people  protest  that  it  never 
rains,  for  the  chill  eternal  fog  of  the  Lima  winter  is 
as  near  rain  as  can  be  and  much  more  penetrating  and 


NEEDS  m  SOUTH  AMERICA  229 

depressing.  In  tlie  damp,  unseated  rooms  of  Buenos 
Aires  and  Santiago  during  the  winter  one  will  need  a 
steamer  rug  or  two.  For  the  tropics,  no  less  than  the 
fly-infested  Argentine  summer,  a  good  mosquito  net- 
ting to  hang  over  one's  bed  will  be  necessary.  Evening 
clothes  are  in  constant  use,  but  for  men  the  tailless 
dinner  coat  is  coming  into  popularity,  replacing  the 
formal  swallowtail. 

Clothes  are  expensive  in  South  America,  often  of 
poor  quality,  and  lack  the  color  and  snap  of  'New  York 
or  Chicago.  So  the  traveler  will  do  well  if  he  pro- 
vides himself  (or  herself)  with  a  wardrobe  sufficient 
to  last  during  the  trip,  taking  ample  supplies  of  linen, 
hosiery,  cravats,  undergarments,  wash  suits  and  the 
like.  "Women  should  stock  up  for  a  famine  in  hairpins, 
hair  nets,  ribbons,  gloves,  veils  and  like  odds  and  ends, 
which  are  dear,  as  a  rule,  and  of  poor  quality,  if  obtain- 
able at  all.  Most  persons  have  preferences  in  toilet 
articles.  These  are  also  expensive  in  South  America, 
by  reason  of  tariff  duties  and  stamp  taxes,  and  one's 
own  particular  brand  or  package  may  not  be  obtainable. 
So  it  is  wisdom  to  lay  in  several  months'  supply  of 
small  articles.  TVhere  such  things  are  intended  for 
personal  use,  and  entered  as  personal  baggage,  without 
intention  to  disguise  merchandise  as  baggage,  the  South 
American  customs  regulations  are  liberal  and  inspection 
prompt  and  courteous. 

Money  comes  next  to  clothes  in  importance.  The 
letter  of  credit  is  the  handiest  way  of  carrying  funds 
and  has  the  additional  advantage  of  being  a  letter  of 
introduction  to  our  branch  banks,  when  it  is  an  Ameri- 


230       BUSmESS  i:^  SOUTH  MIERICA 

can  letter,  as  it  should  be.  American  concerns  have 
been  doing  business  so  long  through  the  banking  or- 
ganizations of  other  countries  that  when  a  letter  of 
credit  or  a  foreign  draft  are  wanted,  they  are  ordered 
through  usual  bank  machinery  and  are  probably  British. 
We  not  only  have  our  own  banks  in  South  America 
now,  but  there  are  advantages  in  dealing  through  them. 
They  are  there  to  consolidate  our  South  American 
trade,  and  help  it  grow.  They  need  the  support  of 
American  business  houses.  Being  the  newest  branch 
banks  in  that  part  of  the  world,  they  work  for  business 
by  rendering  service  and  can  perform  many  chores  and 
render  many  courtesies  that  make  the  path  of  the 
traveler  smoother. 

The  South  American  tour  is  not  cheap.  From  twen- 
ty to  thirty  dollars  a  day  is  a  fair  estimate  of  the 
money  that  will  be  required  for  travel,  living  and  other 
expenses,  according  to  the  countries  visited,  time  spent 
in  each,  baggage  carried,  and  so  on.  Money  is  changed 
every  time  one  enters  a  new  country,  with  a  loss  of 
one-half  to  one  per  cent,  not  counting  fluctuations  in 
exchange  rates  that  may  cause  one's  money  to  depre- 
ciate in  one's  pocket.  Careful  estimates  of  the  amount 
likely  to  be  needed  in  each  country  and  conversion  of 
the  equivalent  from  dollars  into  milreis  or  pesos  on 
one's  letter  of  credit  make  for  economy.  The  majority 
of  Americans  find  South  American  exchange  fluctua- 
tions as  interesting  as  a  horse  race,  watching  them 
from  day  to  day,  and  taking  advantage  of  favorable 
quotations  to  buy  local  money  with  their  letters  of 
credit.    Probably  they  make  no  more  in  the  end  than 


NEEDS  m  SOUTH  AMERICA  231 

the  traveler  who  ignores  the  daily  quotations,  going  to 
his  bank  on  arrival,  buying  as  much  local  money  as  he 
may  need  during  his  stay,  and  having  it  credited  to  a 
checking  account.  Our  branch  banks  are  courteous  in 
extending  this  convenience,  though  it  can  hardly  be 
profitable  to  them  directly. 

Most  Latin  American  countries  impose  taxes  on  com- 
mercial travelers.  One  country  taxes  on  a  national 
basis,  and  a  single  license  suffices  for  all  its  departments 
or  provinces.  Another  will  impose  provincial  and  even 
municipal  taxes.  These  fees  are  collected  by  customs 
officials  in  some  cases,  and  again  by  local  authorities. 
Furthermore,  there  are  ways  of  avoiding  them  by  legal 
means.  The  visiting  salesman  may  be  able  to  work  on 
the  staff  of  the  local  representative  of  his  house,  if  it 
has  connections  already  established.  Or  he  may  work 
as  a  demonstrator,  showing  and  explaining  goods,  but 
taking  no  direct  orders.  Either  the  United  States  con- 
sul or  bank  men  can  give  details  in  each  country. 

Samples  of  merchandise  sometimes  give  considerable 
trouble,  usually  through  lack  of  detailed  knowledge  of 
the  regulations,  which  differ  in  the  various  countries. 
By  trivial  technical  changes  it  is  often  possible  to  avoid 
duty  on  samples,  and  speed  their  clearance  through  the 
customs  houses.  Details  for  each  country  can  be  se- 
cured from  its  consul  in  the  United  States  before  de- 
parture. A  better  way  is  to  put  details  into  the  hands 
of  an  American  express  company  with  Latin  American 
connections.  Instructions  will  be  given  for  drawing 
up  documents  needed  in  the  clearing  of  samples,  and 
details   attended   to   in   each   country   by   the  express 


232       BUSmESS  IN  SOUTH  AMEKICA 

company.  Sometimes  duty  must  be  paid  and  tlie  money 
is  not  returned,  but  it  is  possible  to-  effect  economies  by 
refinements  in  valuation.  Again  samples  are  admitted 
duty  free,  but  a  bond  given  while  they  are  in  the  coun- 
try. If  arrangements  are  made  with  an  express  com- 
pany the  latter  furnishes  the  bond.  In  some  cases 
samples  are  shipped  by  express^ — one  instance  that  came 
to  the  writer's  attention  was  the  shipment  of  a  sample 
automobile  to  Buenos  Aires  and  its  clearance  through 
the  customs  house  by  the  express  company  within  twen- 
ty-four hours  after  arrival  when  it  was  carrying  the 
automobile  company's  representative  through  the  street. 

There  is  a  definite  philosophy  of  samples  in  Latin 
America. 

To  begin  with  fundamentals,  the  Spaniard  and  Por- 
tuguese put  the  burden  of  taxes  on  commerce  rather  than 
land,  buildings  or  income.  Latin  American  countries 
have  retained  this  system.  Possession  of  goods  is  al- 
most suspicious  in  itself.  The  tax  collector  is  alert  at 
once.  They  may  be  dutiable.  He  wants  a  bond  guar- 
anteeing that  you  will  take  them  out  of  the  country 
again.  Maybe  they  can  be  kept  in  the  country  for  only 
a  limited  period.  You  must  produce  documents  de- 
scribing your  samples  as  though  they  were  a  shipment 
of  goods  to  a  customer — an  invoice  giving  weights  and 
measures  in  the  metric  system,  with  quantities  and 
values.  This  invoice  must  be  certified  by  consuls  of 
the  countries  to  be  visited  before  you  leave  the  United 
States.  A  power  of  attorney  is  not  legally  required, 
but  is  often  impressive  to  customs  officials  when  it  sets 
forth   the   representative's   appointment,   his   right  to 


IsTEEDS  m  SOUTH  AMERICA  233 

carry  samples,  take  orders  and  so  on.  If  a  sample  is 
mutilated  so  as  to  destroy  its  value  as  merchandise,  it 
will  often  be  passed  without  duty  or  bond.  So  will 
photographic  representation  of  goods.  Considerable 
time  was  lost  by  an  American  salesman  carrying  sam- 
ples of  lace  curtains  and  a  heavy  duty  paid  in  a  South 
American  country  because  his  curtains  were  whole, 
whereas  a  section  showing  pattern  and  quality  would 
have  been  passed  free. 

Latin  American  customs  officials  are  almost  invari- 
ably courteous  and  prompt  in  clearing  baggage  and  lib- 
eral in  admitting  one^s  personal  effects.  But  for  sam- 
ples a  different  routine  is  followed.  The  traveler  who 
endeavors  to  clear  his  own  is  like  the  man  who  acts  as 
his  own  lawyer.  The  job  should  be  turned  over  to  a 
customs  broker,  or  despacliante.  He  will  charge  a  fee 
for  his  service,  but  will  earn  it  by  saving  time  and 
often  duty  because  he  understands  the  job. 

One  article  carried  by  the  business  man  gives  more 
trouble  than  any  other — advertising  and  printed  matter. 

Yankee  instinct  is  all  toward  fine  printing,  generally 
in  colors.  But  some  of  the  South  American  countries 
penalize  printed  matter  according  to  its  elaborateness. 
In  Brazil,  as  an  illustration,  all  printed  matter  should, 
under  the  tariff,  be  dutiable  at  about  three  and  a  half 
cents  per  pound  regardless  of  the  number  of  printings. 
But  the  customs  officials  have  modified  this  schedule  bv 
special  rulings,  and  the  low  rate  is  allowed  only  on 
printed  matter  in  one  color.  Twocolor  printing  is 
charged  seventy  cents  a  pound,  and  three-color  printing 
one  dollar  and  a  quarter.    Even  a  single  initial  or  line 


234       BUSmESS  IN  SOUTH  AMEEICA 

may  lead  to  classification  at  the  liiglier  rate,  and  it  ia 
suggested  that  plain  black  and  white  be  adhered  to  aa  a 
means  of  avoiding  disputes. 

Trunks  should  be  well  chosen,  not  only  for  stoutness 
and  substantial  fittings,  but  for  transportation  by  mule 
if  necessary.  Along  the  West  Coast,  where  every 
pound  of  freight  and  baggage,  and  sometimes  passen- 
gers, is  loaded  over  the  ship^s  side  into  lighters,  often 
in  rough  weather,  they  must  come  in  for  hard  knocks. 
If  the  most  essential  samples  and  personal  effects  are 
compacted  in  three  or  four  small  trunks  of  the  Army 
service  type,  these  can  be  taken  off  the  railroad  by 
pack  animal  and  larger  baggage  left  behind.  It  is  a 
shortcoming  of  even  expensive  American  traveling 
equipment  that  thinly  plated  iron  fittings  and  locks 
rapidly  corrode  on  sea  voyages  and  in  the  humidity  of 
the  tropics. 

It  is  a  great  convenience  to  have  trunks  and  sample 
cases  marked  not  only  plainly  but  vividly.  Baggage 
checking  is  virtually  unknovni  in  South  America.  In 
the  rush  of  sailing  and  disembarking,  with  scores  of 
trunks  being  swung  into  ships'  holds  and  lighters,  often 
at  night,  the  weary  search  for  and  collection  of  one's 
belongings  is  lightened  when  trunks  are  marked  so  that 
they  may  be  distinguished  wherever  a  side  or  end  shows. 
iN'ames  and  initials  are  not  sufficient.  The  best  iden- 
tification is  two  broad  bands  of  distinctive  colors  run- 
ning clear  around  the  trunk  both  ways.  South  Ameri- 
cans often  use  their  national  colors  for  this  purpose — 
the  blue  and  white  of  Argentina,  green  and  yellow  of 
Brazil,  red,  white  and  blue  of  Chile,  and  so  on. 


NEEDS  m  SOUTH  AMERICA  235 

One  useful  piece  of  baggage  is  an  ^'office  trunk,"  an 
Army  service  box  devoted  to  stationery,  records,  books 
and  office  equipment.  High  prices  are  asked  in  South 
America  for  writing  paper,  envelopes,  carbon  paper, 
clips,  loose  leaf  blanks,  account  books,  filing  devices 
and  the  like.  Verv  often  these  are  of  British  or  Eu- 
ropean  manufacture,  and,  therefore,  different  in  size 
and  system.  The  business  man  will  need  printed  sta- 
tionery and  records  standard  with  those  at  home.  Rea- 
sonable supplies  should  be  carried — the  explanation  at 
customs  houses  that  this  is  material  needed  in  the 
owner's  profession  will  pass  it  as  baggage  without  duty 
if  quantities  are  really  reasonable.  The  office  trunk 
should  contain  maps,  cable  codes,  Spanish  and  Portu- 
guese dictionaries  and  other  tools  of  the  kind.  Some  of 
the  special  reports  of  the  Department  of  Commerce  on 
Latin  American  business  methods  will  be  found  very 
useful  in  the  countries  with  which  they  deal.  A  cer- 
tain number  of  books  will  be  picked  up  in  traveling — 
directories,  guidebooks,  statistical  digests,  maps  and 
government  bulletins  purchased  in  the  different  coun- 
tries. 

Business  cards  and  in  some  cases  special  stationery 
printed  in  Spanish  or  Portuguese  will  be  found  useful. 
For  a  short  trip  of  investigation  by  an  executive  of  an 
American  business  concern  the  regular  card  in  English 
used  at  home  will  answer  every  purpose.  But  for  the 
salesman,  branch  manager  and  others  making  an  ex- 
tended stay  in  Southern  countries,  or  living  there,  the 
use  of  the  language  of  the  country  is  necessary.  In 
many  cases  cards  and  stationery  are  printed  in  two 


236       BUSINESS  IN  SOUTH  AMEEICA 

languages,  either  Spanish  or  Portuguese,  with  Eng- 
lish translations  of  names  and  titles  underneath. 

One  great  convenience  for  the  traveling  American 
business  man  is  a  typewriter.  At  home,  machines  can 
be  rented  for  use  in  one's  hotel  room.  There  are  also 
hotel  stenographers  and  one  may  accept  the  familiar 
invitation  to  the  visitor,  "If  you  have  any  writing  to 
do,  just  make  use  of  my  office  and  secretary.'^  In  South 
America,  however,  offices  are  not  so  large  or  well 
equipped,  public  stenographers  are  seldom  available, 
and  typewriters  can  be  rented  only  with  difficulty  and 
delay.  A  machine  taken  along  will  be  found  useful 
again  and  again.  In  most  countries  typewriters  for 
personal  use  are  admitted  free,  without  formality,  as 
baggage.  Occasionally  duty  is  imposed,  as  in  Peru, 
where  five  to  fifteen  dollars  is  charged,  according  to 
condition  and  value  of  the  machine.  This  money  is 
not  returned  on  leaving  the  country,  but  a  typewriter 
can  be  stored  at  the  customs  house  without  charge  and 
reclaimed  when  departing. 

Finally,  careful  attention  should  be  given  to  arrange- 
ments for  forwarding  and  receiving  mail  and  for  the 
transaction  of  unavoidable  business  chores  at  home  while 
the  traveler  is  absent. 

Most  Americans  set  out  lightly  for  South  America, 
to  be  gone  from  three  months  to  a  year,  under  the  im- 
pression that  the  world  is  pretty  small  nowadays,  and 
that  Kio  de  Janeiro  is  probably  much  like  New  York, 
and  that  cables  and  United  States  mail  reach  every- 
where. With  the  desk  telephone  and  telegraphic  night 
letter  we  have  attained  a  facility  in  communication 


:NrEEDS  m  south  America       237 

that  deludes  us  when  we  go  abroad.  Uncle  Sam's 
mail  service  to  South  America  is  slow  and  uncertain, 
with  intervals  of  one  to  two  months  between  the  mail- 
ing and  receipt  of  letters.  Cables  are  expensive,  at 
fifty  cents  to  one  dollar  a  word.  In  some  ways  tha 
traveler  is  marooning  himself — a  sense  of  isolation  is 
one  of  the  business  difficulties  the  Yankee  complains 
about  in  South  America.  If  he  is  traveling  fast,  mail 
may  be  weeks  catching  up  with  him,  forwarded  from 
point  to  point.  A  mistake  in  sending  letters  to  him  in 
Buenos  Aires  bv  the  West  Coast  when  the  railroad  over 
the  Andes  is  blocked  by  snow  will  stretch  the  delay  into 
months. 

Before  leaving  home  somebody  should  be  authorized 
to  receive  his  mail,  open  sealed  communications  with 
discretion  and  forward  only  such  as  require  his  per- 
sonal attention.  Sealed  circulars  forwarded  simply 
by  re-addressing  will  involve  extra  postage  and  fines — 
it  may  cost  him  ten  or  twenty  cents  to  get  a  fat  letter 
which  proves  to  be  nothing  more  than  a  charity  appeal. 
Some  of  his  mail  can  be  answered  by  his  representatives 
in  the  United  States. 

Our  consuls  maintain  facilities  for  receiving  mail, 
but  are  hampered  by  Uncle  Sam's  parsimony  in  paying 
decent  wages  to  assistants  and,  therefore,  their  services 
in  forwarding  mail  are  not  always  to  be  depended 
upon.  Better  service  is  rendered  by  our  branch  banks 
in  South  America,  travelers'  mail  and  cable  messages 
being  handled  by  their  commercial  departments.  The 
best  service  of  all,  of  course,  is  where  mail  can  be  di- 


238       BUSINESS  IIST  SOUTH  AMERICA 

rected  to  South  American  representatives  of  the  trav- 
eler's house. 

As  an  example  of  the  need  for  leaving  certain  busi- 
ness matters  in  competent  hands  at  home,  take  the  com- 
plexities of  the  United  States  income  tax.  To  deposit 
a  bond  coupon  it  is  necessary  to  make  out  forms  and 
sign  them.  Any  error  or  omission  in  the  form  may 
make  it  impossible  for  one's  bank  to  accept  the  deposit. 
A  delay  of  several  months  may  follow,  with  loss  of  in- 
terest and  troublesome  long-range  correspondence. 


CHAPTER  XVIII 

THE  SOUTH  AMERICAN  FARMER 

The  purchasing  power  of  the  American  farmer  is  so 
great  and  his  standard  of  living  and  production  of 
wealth  so  high,  that  he  is  one  of  the  hest  customers  of 
the  American  manufacturer  and  merchant.  Produc- 
tion and  selling  plans  must  inevitably  include  him. 
Great  business  concerns  have  been  built  almost  entirely 
upon  his  patronage— mail  order  houses,  implement  fac- 
tories and  the  like.  Comforts  and  even  luxuries  which 
were  sold  only  to  well-to-do  city  people  a  generation 
ago,  as  bathroom  fittings,  pianos,  piano  players,  steam- 
heating  apparatus  and  automobiles,  are  to-day  regarded 
as  necessities  on  the  American  farm.  The  dairy  farmer 
nowadays  invests  as  much  money  in  a  modern  labor- 
saving  bam  as  would  have  bought  a  farm  two  gener- 
ations ago.  He  lights  his  home  and  does  his  work 
with  electricity.  The  telephone  equipment  of  American 
farms  would  come  very  near  duplicating  that  of  some 
countries  in  Europe.  Anything  which  will  enhance 
comfort,  increase  production,  lighten  labor  or  broaden 
life,  finds  in  the  American  farmer  an  intelligent,  in- 
terested, prospective  customer. 

This  being  so,  the  American  business  man  naturally 
thinks  of  the  farming  population  when  he  studies  South 

239 


240       BUSmESS  IN  SOUTH  AMEEICA 

America  with  a  view  to  extending  his  market  there.  He 
knows  that  all  Latin  America  is  agricultural  at  bottom. 
Eighty  per  cent  of  its  people  are  soil  dwellers,  and,  apart 
from  minerals,  chemicals  and  forest  products,  its  ex- 
ports come  from  the  soil — cattle  and  hides,  gi-ain  and 
coffee,  fruit,  vegetable  fats,  chocolate,  sugai',  spices, 
flavorings.  An  era  of  aggressive  development  is  un- 
doubtedly in  sight  on  the  Southern  continent.  Material 
progress  the  next  ten  or  twenty  years  will  astonish  the 
world.  Practically  all  of  this  development,  however, 
will  be  agricultural,  the  opening  up  of  new  regions  for 
settlement  and  farming  by  the  building  of  railroads, 
highways  and  poii;  outlets  to  take  the  farmers'  products 
to  world  markets. 

Think  of  the  American  farmer,  and  several  charac- 
teristic types  come  to  mind.  One  is  the  quarter-section 
general  farmer  of  the  Corn  Belt  with  his  big  barns  and 
huge  draft  horses,  his  gang  plows  and  cultivators,  his 
corn  and  clover,  cattle  and  hogs,  the  spinning  into  town 
with  his  family  Saturday  afternoon  in  an  automobile. 
Another  is  the  dairy  farmer  with  his  model  barn  and 
milking  machinery.  Another,  the  breeder  absorbed  in 
his  fine  cattle,  hogs,  sheep  and  horses.  There  are 
specialists,  like  the  fruit  grower,  the  trucker,  the  pro- 
ducer of  winter  vegetables.  Of  course,  not  every  Corn 
Belt  farmer  has  his  automobile,  nor  the  dairyman  his 
milking  machine,  and  our  farming  decidedly  runs  to 
seed  in  mountain  sections.  But  take  the  American  far- 
mer as  a  whole,  and  he  earns  more,  lives  better,  and  is 
on  an  intellectual  level  with  the  bourgeois  of  countriea 
where  the  land  is  tilled  by  peasants. 


I 


THE  SOUTH  AMERICAN  FARMER     241 

Let  the  picture  of  the  American  farmer  be  what  it 
may,  you  will  hardly  find  his  counterpart  in  South 
America.  There  are  many  splendid  ranches  and  plan- 
tations in  the  more  advanced  countries,  like  Argentina, 
Brazil  and  Uruguay,  and  great  landowners  with  mod- 
ei-n  methods  adopted  after  personal  visits  to  the  United 
States  and  Europe.  But  these  men,  not  farmers  so 
much  as  manufacturers  of  soil  products  on  a  gi-eat  scale, 
are  the  exceptions.  The  mass  of  soil  dwellers  live  in 
the  most  primitive  way,  with  hardly  the  necessities  of 
life,  much  less  comforts,  luxuries  or  modern  farming 
devices.  They  till  the  land  as  tenants,  or  live  upon 
small  holdings  of  their  own  more  nearly  like  the  orig- 
inal savages  of  the  Southern  continent  than  the  indus- 
trious, enterprising  peasants  of  Europe.  Between 
themselves  and  the  great  landowners  there  is  no  such 
middle  class  as  our  farmers,  just  as  there  is  no  middle 
class  in  South  American  city  life  or  politics. 

Our  country  was  settled  by  offering  free  land  to  im- 
migrants. South  America  has  brought  in  immigi'ants 
chiefly  to  work  for  the  large  landowners,  who  dominate 
its  countries  politically.  Instead  of  obtaining  land  of 
his  own,  and  working  with  his  family  to  establish  a 
home,  the  immigrant  comes  alone,  farms  a  tract  on 
lease  several  years,  leaves  it  planted  in  alfalfa  or  coffee, 
and  goes  back  home  to  marry.  Colonies  have  been 
established—German,  Swiss,  Italian,  Portuguese, 
Spanish,  Japanese,  all  owning  land,  and  prosperous. 
But  these  colonies  are  few.  They  represent  almost  the 
only  specialty  farming  on  the  continent. 

Hundreds  of  thousands  of  immisn-ants  have  gone  to 


242       BUSmESS  IN  SOUTH  AMEKICA 

East  Coast  countries  the  past  generation  from  Spain, 
Portugal  and  Italy.  But  by  far  the  greater  number 
have  returned  to  their  own  countries  after  a  few  years' 
work  for  wages,  or  a  term  as  tenants  under  contract  to 
the  gi-eat  landowners.  Coming  as  single  men,  to  accu- 
mulate the  few  thousand  dollars  that  represent  fortune 
in  their  own  countries,  they  have  gone  back  home  to 
purchase  land,  marry  and  raise  a  family.  The  South 
American  immigrant  who  stays  is  usually  a  city  dweller 
who  becomes  a  merchant.  The  small  landowner  is  a 
native,  in  many  cases  an  Indian  or  of  mixed  blood.  He 
is  the  ^^Man  with  the  Hoe"  literally,  whacking  away 
at  the  soil  with  his  one  cumbersome  farm  implement, 
like  that  in  Edwin  Markham's  poem,  with  which  he 
plows,  plants,  cultivates  and  harvests  his  crop. 

The  lack  of  an  agricultural  middle  class  is  shown  in 
the  absence  of  our  wide  diversity  of  food  specialties. 
South  American  countries  produce  almost  no  clean 
milk,  fresh  butter,  domestic  cheese,  fresh  or  dried  fruits, 
all-year-round  fresh  vegetables  or  the  other  soil  products 
which  have  become  a  matter'  of  course  with  us.  Their 
range  of  climate  and  soil  make  it  possible  to  grow  these 
specialties,  but  the  knowledge,  organization,  transpor- 
tation and  marketing  facilities  are  still  to  come.  Thus, 
a  region  like  Western  and  ISrorthern  Argentina,  which 
virtually  duplicates  California  and  Florida,  actually 
imports  dried  fruits  from  the  United  States,  while  fresh 
winter  vegetables,  instead  of  being  within  the  reach  of 
wage-earners  in  Buenos  Aires,  are  luxuries  obtainable 
only  by  the  rich.  With  seasons  exactly  opposite  to  those 
of  the  !N'orthern  hemisphere,  South  America  might  en- 


THE  SOUTH  AArERICA:N  FAEMER     243 

joy  a  large  export  business  in  fresh  fruits,  winter  vege- 
tables, eggs  and  dairy  products,  supplying  the  United 
States  and  Europe  in  months  of  scarcity  and  high 
prices.  Actually,  there  is  hardly  any  movement  of  these 
products  from  province  to  province  in  the  same  coun- 
try, and  only  a  slender  trade  between  the  different 
South  American  countries.  As  free  land  and  cheap 
land  have  been  unobtainable,  so  there  has  been  none  of 
the  community  and  state  organization  which  encourages 
settlement  in  the  United  States  and  provides  channels 
to  market  for  the  farmers'  products. 

The  American  farmer  largely  shapes  his  own  pros- 
perity by  public  opinion.  A  reader  and  thinker,  he 
knows  what  he  wants,  and  gets  it  through  organization 
or  government  assistance.  Hundreds  of  millions  of  dol- 
lars have  been  spent  for  research  on  his  behalf,  and 
when  crises  ai'ise  in  the  shape  of  crop  pests  or  live- 
stock diseases,  his  intelligence  assures  teamwork  with 
government  agencies.  Ability  to  govern  himself  in 
local  matters  is  shown  in  his  development  of  the  com- 
munity where  he  lives,  materializing  in  schools,  roads 
and  like  improvements.  For  lack  of  this  public  opinion 
in  South  America  the  country  population  lacks  sanita- 
tion, educational  facilities,  highways  and  practically  all 
the  basic  necessities  of  a  healthy,  prosperous  country- 
side. Pests  like  foot  and  mouth  diseases  are  accepted  as 
uncurable  and  inevitable.  Fertile  regions  periodically 
stricken  by  drought  or  floods  are  farmed  without  effort 
toward  remedies  such  as  irrigation,  the  erection  of  silos 
or  the  introduction  of  drought-resisting  crops.  Costly 
programs  for  experimental  stations  and  the  teaching  of 


244       BUSHTESS  IN  SOUTH  AMEEICA 

more  scientific  methods  have  repeatedly  been  launched 
by  one  government,  only  to  be  scrapped  a  year  or  two 
hence  when  the  government  changes,  and  public  opinion 
is  so  little  developed  among  South  American  farmers 
that  they  make  no  protest. 

Politics  does  not  concern  the  South  American  peasant. 
In  some  countries,  particularly  Argentina  and  Uru- 
guay, voting  is  compulsory — fail  to  vote,  and  you  are 
fined.  It  has  been  found  impossible  to  enforce  the  law, 
but  those  countries  are  keenest  about  political  issues, 
and  the  most  advanced  in  agriculture.  It  costs  about 
twenty  dollars  to  vote  in  Brazil,  and  doesn't  do  much 
good  anyway  because  the  country,  only  thirty  years  a 
republic,  and  scattered  all  over  creation,  is  not  ready 
for  broad  self-government.  In  other  countries  voting 
is  limited  by  illiteracy  and  indifference.  Politics  is 
left  to  the  politician,  and  if  one  remembers  that  these 
countries,  though  all  farmed  at  least  a  century  before 
white  men  colonized  our  own  continent,  are  still  very 
young,  it  will  be  admitted  that  the  politicians  are 
steadily  doing  better  for  the  people. 

For  the  manufacturer  there  is  a  South  American 
market  among  the  great  landowners  of  the  more 
advanced  countries.  The  coffee-grower  of  Brazil,  the 
stock-raiser  and  grain-rancher  of  Argentina  and 
Uruguay,  the  wool-producer  of  Southern  Chile  and 
Argentina,  are  almost  invariably  men  of  business 
ability,  often  with  scientific  agi*icultural  training,  and 
profiting  by  tours  of  observation  in  the  United  States 
and  Europe.  They  appreciate  modern  agricultural 
devices,   and  are  heavy  purchasers  of  tools,   fencing. 


THE  SOUTH  AMERICAJSr  FARMER     245 

building  materials,  or  anything  which  will  make  coun- 
try life  comfortable.  Their  purchases  are  really  lim- 
ited by  lack  of  knowledge  of  many  devices  which  we 
consider  indispensable. 

A  Spaniard  who  had  spent  ten  years  in  the  United 
States  as  a  merchant  went  to  Argentina  and  invested  his 
money  in  a  large  ranch.  Part  of  the  equipment  of 
the  American  bungalow  w^hich  he  built  as  a  residence 
w^as  an  American  steam-heating  plant.  During  the 
winter  he  lives  in  a  Buenos  Aires  apartment,  but  makes 
frequent  trips  to  his  estancia.  He  told  the  writer  that 
it  was  his  rule  to  \vire  his  superintendent  three  days 
before  starting  for  the  country,  so  the  American  steam- 
heating  plant  could  be  stoked  up  and  the  house  made 
warm  and  cozy  on  American  lines.  He  was  thoroughly 
proud  of  this  standard  of  comfort  learned  in  the  United 
States,  and  laughed  at  his  Ai-gentino  neighbors,  in  their 
chilly   Spanish-type  houses,  for  not  knowing  how  to 

live. 

Another  incident  that  came  under  the  writer's  notice 
in  Argentina  was  the  sale  of  steel  huts  made  for  war 
work  with  the  American  army  in  France.  One  of  our 
large  steel  companies  had  a  lot  of  these  huts  left  on  its 
hands  at  the  armistice.  A  representative  was  sent  to 
Buenos  Aires  to  show  them  to  the  Argentines.  They 
had  never  seen  anything  of  this  kind  before,  and  their 
convenience,  durability  and  economy,  coupled  with  the 
housing  shortage  and  high  cost  of  building  materials, 
caused  them  to  be  eagerly  snapped  up  for  ranch  use. 
Simply  to  show  such  a  novelty  was  to  sell  it,  and  this 


V 


246       BUSINESS  IN  SOUTH  AMERICA 

principle  applies  to  many  other  farm  devices  and  con- 
veniences in  the  market  at  home. 

As  most  of  our  sales  of  merchandise  in  South 
American  cities  have  heen  made  by  large  corporations 
with  capital  to  establish  branches  and  extend  credit,  so 
large  corporations  have  been  foremost  in  developing 
markets  for  products  that  appeal  to  ranch  owners. 
Implement  manufacturers  were  first  to  establish  such 
branches,  and  by  intensive  work  through  resident  rep- 
resentatives who  know  the  countries  and  the  people, 
have  created  profitable  outlets  for  a  wide  range  of 
apparatus.  Automobile  manufacturers  come  next,  and 
wherever  they  have  established  permanent  branches,  in 
charge  of  capable  managers,  sales  of  automobiles  are 
followed  by  sales  of  tractors,  with  a  developing  demand 
for  motor  trucks,  and  the  good  roads  sentiment  which  is 
necessary  before  the  latter  can  displace  the  slow  ox-cart 
of  Brazil,  the  Argentine  freight  wagon  with  its  ten- 
foot  mud-defying  wheels,  and  the  pack  animals  of  the 
Andes.  But  smaller  manufacturers,  producing  farm 
devices  not  so  well  known,  have  thus  far  made  little 
headway,  where  they  have  made  any  effort  at  all. 

Drought  and  aridity  are  the  agricultural  handicaps 
of  a  very  large  area  on  the  Southern  continent.  Most 
of  the  region  west  of  the  Andes  is  practically  rainless 
and  requires  irrigation  for  development.  Half  the 
region  west  of  the  Andes  is  either  rainless  or  has  so 
slight  a  rainfall  that  irrigation  is  likewise  indispensable. 
The  great  cattle  regions  of  Argentina,  Uruguay  and 
portions  of  Brazil  suffer  from  periodical  droughts,  and 
such  safeguards  as  the  silo  are  almost  unknown  as  yet. 


THE  SOUTH  AMERICAN  FARMER     247 

The  first  silo  erected  in  the  Sao  Paulo  district  of  Brazil 
attracted  so  much  attention  that  officials  of  the  pro- 
vincial government  spent  a  day  journeying  to  the  ranch 
where  it  was  located,  conducting  dedication  ceremonies. 
If  the  movement,  which  during  the  past  ten  years  has 
equipped  so  many  farming  sections  of  the  United 
States  with  silos,  could  be  extended  to  the  Southern 
continent,  actual  sales  at  the  outset  might  be  small,  but 
ultimately  they  would  be  large.  Expenses  for  such  a 
campaign  might  be  prohibitive  if  undertaken  by  a 
single  concern.  As  a  side  line  for  manufacturers  of 
farm  apparatus  with  South  American  branches,  how- 
ever, silos  would  ultimately  develop  demand,  and 
against  the  American  farmer  whose  needs  are  met  by 
one  or  two  silos,  the  average  South  American  rancher 
would  buy  them  by  the  dozen. 

This  holds  true  of  many  other  farm  appliances.  One 
example  that  comes  to  mind  is  the  need  for  a  durable, 
economical  wire  fence  designed  to  be  pig-proof.  On 
the  largest  hog  ranch  in  Argentina  the  owners  had  read 
an  advertising  description  of  such  a  fence  in  American 
farm  papers  and  imported  it  themselves.  They  were 
delighted  with  their  pig-proof  fence,  the  only  one  of 
its  kind  in  the  republic,  and  delighted  with  their  own 
discovery  of  so  valuable  a  Yankee  labor-saving  device. 

Hundreds  of  similar  articles,  advertised  in  our  own 
farm  press,  are  unknown  to  the  South  American  agri- 
culturist. His  faiTU  journals  are  few,  and  not  utilized 
for  advertising  to  the  same  extent  as  our  owti.  Son.e- 
times  he  sees  an  excellent  new  device  at  an  agricultural 
show,  or  discovers  it  in  an  export  or  agricultural  publi- 


248       BUSINESS  IN  SOUTH  AMERICA 

cation  from  the  United  States  or  Europe.  But  this 
does  not  build  anything  approaching  trade.  As  for  the 
eighty-odd  per  cent  of  small  landowners,  the  great 
majority  do  not  read  at  all,  and  their  present  standard 
of  living  is  so  low  that  labor-saving  devices,  home  con- 
trivances and  comforts  have  no  appeal  whatever.  What 
is  time,  convenience  or  comfort  to  people  living  in  a 
bamboo  lattice  shelter  or  'dobe  hut,  with  a  few  rags  for 
clothing,  a  few  boards  and  tins  for  cooking,  and  a  little 
clearing  in  the  wilderness  where,  growing  all  together, 
are  yams,  cocoanuts,  corn,  tobacco,  cassava,  bananas, 
cotton,  oranges  and  grapefruit ! 

Erom  the  farming  standpoint  South  American  coun- 
tries to-day  are  perhaps  most  interesting  as  outlets  for 
our  own  farm  products,  due  to  their  own  agricultural 
backwardness,  and  to  their  concentration  on  a  few  big 
staples  like  meat,  grain  and  coffee.  We  cannot  sell 
frozen  beef  to  Argentina,  but  we  are  selling  her  bulls 
and  boars  to  improve  her  own  meat  exports,  and  dried 
fruit  and  canned  goods.  The  market  for  our  flour  in 
Brazil  is  shrinkiiig  as  that  country  increases  its  wheat 
crop,  sets  up  flour  mills,  and  also  buys  Argentino  flour. 
But  we  can  sell  canned  butter,  condensed  milk  and 
cheese.  Somewhere  in  the  state  of  Bahia  there  is  a 
single  navel  orange  tree  which  is  the  great-grealrgrand- 
parent  of  California's  orange  industry — it  must  bo  alive 
still,  for  they  say  an  orange  tree  never  dies.  Yet  every 
South  American  country  pays  tribute  to  our  fruit  grow- 
ers, buying  their  clean,  weU-graded  and  skillfully 
packed  products  at  what  we  would  consider  prohibitive 
prices — pears  and  grapes  from  California,  apples  from 


THE  SOUTH  AMEEICA^  FAR:\rER      249 

Oregon  and  Washington.  It  is  true  that  oranges  are 
not  jet  imported,  but  they  might  well  be  in  South 
America's  summer,  when  the  local  product  is  scarcest, 
and  would  sell  as  luxuries  if  attractive  in  appear- 
ance and  quality.  Building  trade  for  the  American 
farmer  on  the  Southern  continent  is  largely  a  matter 
of  American  ships,  running  on  regular  schedules,  with 
refrigeration  service.  When  the  American  farmer 
realizes  the  value  of  ships,  and  backs  them  up,  and 
backs  tlie  manufacturer  and  salesman  in  converting  his 
raw  products  into  attractive  specialties  for  ^  South 
American  markets,  then  South  Americans  will  be 
among  his  best  customers. 


CHAPTEK  XIX 

WHO  WAS  WHO  IN  SOUTH  AMERICA— PARAGRAPHS  OP 

HISTORY 

When  Secretary  Boot  visited  Soutli  America,  speak- 
ing in  Montevideo,  tie  gi'ouped  Washington,  Bolivar 
and  San  Martin  as  liberators  of  the  American  hemis- 
phere. 

That  hurt  the  Uruguayans  a  little.  Had  Mr.  Koot 
not  heard  of  Artigas,  the  liberator  of  their  country? 
Uruguay  is  only  a  little  country,  they  confessed,  about 
the  size  of  Oklahoma — ^but  it  had  had  its  Washington, 
nevertheless. 

When  the  Argentino  or  the  Chileno  set  out  upon  their 
first  visit  to  the  United  States,  they  conscientiously 
study  the  outline  of  our  national  history,  and  know 
something  about  Washington,  Lincoln,  Franklin, 
Jefferson,  the  Declaration  of  Independence,  and  so 
forth.  Perhaps  they  know  much  already,  as  lawyers, 
from  the  study  of  our  constitution,  or  as  historians  and 
scholars.  So  it  is  humiliating  to  learn  that  even 
Americans  visiting  the  Southern  continent  may  not 
clearly  know  who  San  Martin  or  O'Higgins  were,  and 
that  they  confuse  the  fine  story  of  South  America's 
struggle  for  independence  with  "revolutions"  generally. 

The  following  brief  notes  on  South  America's  history 

250 


WHO  WAS  WHO  m  SOUTH  AMEKICA   251 

and  notable  men  will  give  an  outline  sketch,  it  is  hoped, 
and  perhaps  lead  to  wider  reading  in  works  now  avail- 
able in  English; 

The  desire  for  independence  grew  up  in  South 
America  about  the  beginning  of  the  nineteenth  cen- 
tury. Our  Kevolution,  and  that  of  the  French,  bred 
patriots  on  the  Southern  continent.  The  Spanish 
colonies  had  many  grievances.  Legally,  they  w^ere  the 
property  of  the  King  of  Spain,  not  the  Spanish  people. 
Commerce  was  heavily  taxed,  and  trading  with  coun- 
tries other  than  Spain  prohibited.  To  plant  grapes  or 
olives,  make  wine  or  oil,  or  in  any  way  compete  with 
Spanish  industries,  was  also  prohibited.  To  prevent 
the  sale  of  colonial  products  elsewhere  than  in  Spanish 
markets,  heavy  export  taxes  were  levied.  For  two 
hundred  years,  under  the  viceroys,  colonial  government 
had  been  a  combination  of  monopoly,  oppression, 
paternalism  and  favoritism. 

Then  a  little  group  of  patriot  leaders  sprang  into 
activity,  and  in  the  dozen  years  from  1810  to  1822  set 
free  every  Spanish  colony  south  of  the  Isthmus,  leaving 
only  Brazil  and  the  three  Guianas  under  European 
domination. 

Most  Americans  have  heard  of  Bolivar,  probably 
because,  born  in  Venezuela,  he  was  nearest.  Few  have 
heard  of  San  Martin,  and  still  fewer  of  Miranda, 
Moreno,  Belgi-ano,  Artigas,  Lavalleja,  O'Higgins  or 
Cochrane. 

Two  great  revolutionary  movemerts  started  in  South 
America  at  the  same  time,  one  in  the  north  and  the 


252       BUSIJSTESS  IN  SOUTH  AMEKICA 

other  in  the  south.  Each  had  its  outstanding  soldier- 
patriots,  Bolivar  in  the  north  and  San  Martin  in  the 
south.  As  to  which  was  greatest,  South  Americana 
themselves  have  been  in  hot  controversy  more  than  a 
century,  without  arriving  at  a  decision.  Viewed  in 
another  way,  Liberty  had  two  cradles  in  South  America, 
one  in  Venezuela  and  the  other  in  Argentina.  The  influ- 
ence of  Venezuela  was  possibly  the  greatest  because, 
besides  the  leadership  of  Bolivar,  she  furnished  the 
southern  cause  men  like  Miranda,  who,  working  in 
Argentina,  was  the  grandfather  of  South  American  in- 
dependence; Sucre,  rated  as  the  ablest  military  com- 
mander after  San  Martin,  and  Andres  Bello,  who  was 
the  teacher  of  Bolivar,  and  afterwards  the  intellectual 
and  educational  leader  of  Chile.  But  for  every 
Venezuelan  patriot,  Argentina  and  Uruguay  had  a  fit 
mate,  and  it  was  the  cooperation  of  northern  and  south- 
ern  leaders   in   the   common   cause   that   finallv   won 

4/ 

independence. 

Jose  de  San  Martin  was  born  in  Argentina,  in  1778, 
the  son  of  a  Spanish  army  captain,  given  a  military 
education  in  Spain,  fought  for  Spain  against  France, 
and  in  1812  returned  to  Argentina,  where  the  patriot 
army  was  fighting  for  freedom.  This  army  lacked 
training  and  discipline,  and  was  being  defeated  re- 
peatedly by  the  Spanish  royalist  forces.  San  Martin 
started  as  lieutenant-colonel  of  cavalry,  trained  a 
squadron  of  mounted  grenadiers,  routed  a  royalist 
force,  and  quickly  rose  to  the  command  of  one  of  the 
patriot  armies.  Thus  far  the  fighting  had  been  chiefly 
defensive,  in  the  northern  provinces  of  the  country. 


WHO  WAS  WHO  IN  SOUTH  AMERICA   253 

On  the  plea  of  bad  health,  San  Martin  retired  south  to 
Mendoza,  which  is  Argentina's  Los  Angeles.  This  was 
camouflage  for  the  organization  of  an  offensive  expe- 
dition against  the  Spaniard  in  Chile,  where  before 
Argentina's  forces  had  been  defending  themselves 
against  invasion  of  the  upper  provinces  from  Peru. 
If  the  palm  of  leadership  were  awarded  for  the  most 
outstanding  and  clean-cut  achievement  in  South  Ameri- 
can independence,  then  San  Martin  deserves  it  for  his 
passage  of  the  Andes.  It  took  two  years  to  raise  and 
equip  his  Army  of  the  Andes,  comprising  only  4,000 
or  5,000  Argentine  gaudies,  or  cowboys.  The  Govern- 
ment at  Buenos  Aires  had  no  funds,  and  women  sold 
their  jewels  for  San  Martin.  Everything  had  to  be 
made  in  Mendoza — muskets,  cannon,  powder,  trappings 
for  man  and  horse.  In  this  emergency  there  arose 
another  hne  iigure,  the  priest  Fray  Luis  Baltran,  who 
was  a  born  engineer  and  munitions  maker.  In  passing, 
it  is  interesting  to  know  that,  as  Spanish  priests  were 
the  chief  humanitarian  influence  in  South  America 
when  the  Indians  were  being  exploited  after  the  con- 
questj  so  they  were  often  on  the  side  of  the  patriots 
during  the  wars  for  independence.  Padre  Baltran 
tucked  up  his  priestly  frock  and  began  equipping  the 
army.  He  was  a  car^/enter,  an  architect,  a  blacksmith, 
a  watchmaker,  an  artilleryman,  a  chemist,  a  draftsman, 
a  mathematician,  a  physicist,  a  ropemaker,  a  physician. 
He  took  down  the  church  bells  to  cast  cannon,  made 
muskets  and  saddles,  gun  carriages  and  knapsacks,  and 
with  a  piece  of  charcoal  drew  on  the  wall  of  his  work- 
shop   contrivances   for    taking   the    artillery    over    the 


254       BUSINESS  IN  SOUTH  AMEKICA 

Andes.  San  Mai^tin's  passage  of  the  Andes  has  been 
compared  to  Napoleon's  passage  of  the  Alps.  Napoleon 
crossed  at  an  altitude  of  less  than  8,000  feet,  while  San 
Martin  reached  nearly  13,000  feet,  men  and  horses 
suffering  from  the  terrible  mountain  sickness.  His 
force  was  divided,  crossing  through  several  passes,  and 
the  Spaniards  cleverly  deceived  as  to  where  the  real 
blow  would  fall.  The  start  was  made  in  January,  1817, 
and  on  February  12,  that  year,  less  than  a  month  after 
the  Army  of  the  Andes  left  Mendoza,  the  Spanish  forces 
had  been  practically  destroyed.  Mendoza  to-day  calls 
itself,  with  reason,  ''The  Nest  of  the  Argentine  Eagle." 
The  independence  of  Chile  was  proclaimed,  but  Peru 
remained  a  Spanish  stronghold.  Then  San  Martin 
organized  a  Navy  with  the  help  of  Lord  Cochrane,  a 
British  naval  officer  temporarily  in  disgrace  at  home. 
Lord  Cochrane  landed  the  Argentine  and  Chilean 
armies  at  Callao  in  1820,  the  Spaniards  withdrew  from 
Lima,  San  Martin  proclaimed  the  independence  of 
Peru,  and  a  little  later  Bolivar  defeated  the  Spanish 
army,  and  Peru  was  set  free  from  Spanish  dominion, 
San  Martin  died  in  France  in  1850,  but  his  body  lies 
in  the  Cathedral  of  Buenos  Aires.  He  believed  in  in- 
dependence, but  not  in  Latin  American  republics,  and 
as  Latin  American  sentiment  was  overwhelmingly 
democratic  he  withdrew  to  Europe  to  end  his  days. 
His  death  and  exile  were  typical  of  the  factional  dis- 
putes following  South  American  liberation,  more 
heated  than  our  own  in  the  first  days  of  independence. 
Bolivar  also  died  in  banishment,  Belgrano  in  obscurity, 
O'Higgins  and  Artigas  in  exile,  Sucre  by  assassination. 


WHO  WAS  WHO  IN  SOUTH  AMERICA    255 

Simon  de  Bolivar  was  born  in  Caracas,  Venezuela, 
in  1783.  His  ancestors  had  lived  in  the  country  for 
nearly  two  centuries,  being  of  North  Spanish  descent. 
This  suggests  an  interesting  fact — that  while  Spain^s 
American  colonies  were  conquered  chiefly  by  cavaliers 
from  the  knightly  southern  provinces,  five  of  the  six 
liberators  who  won  South  American  independence  were 
descendants  of  hard-headed  northern  Spaniards.  San 
Martin's  ancestors  came  from  Leon,  Bolivar's  from 
Viscaja,  Miranda's  from  Asturias,  Moreno's  from  San- 
tandar,  Artigas'  from  the  Basque  provinces,  and  Sucre 
was  of  Flemish  descent.  The  two  liberators  of  Mexico 
were  also  from  Northern  Spain — Iturbide  from  Vall- 
adolid  and  Hidalgo  de  Costilla  from  Viscaya.  Bolivar 
probably  had  a  tincture  of  Indian  blood.  Left  an 
orphan,  he  grew  up  wild  among  the  Venezuelan  coun- 
try people,  and  got  his  only  schooling  from  two  scholars 
— an  eccentric  philosopher,  Simon  Rodriguez,  who 
taught  him  love  of  liberty  along  with  the  three  R's,  and 
the  famous  Andres  Bello.  At  fourteen  he  was  a  soldier, 
at  sixteen  in  Spain,  and  a  worshiper  of  Napoleon. 
Meeting  Rodriguez  again  in  Europe,  he  took  an  oath 
to  liberate  South  America  from  Spanish  rule,  and  re- 
turning to  his  native  land  in  1813,  where  an  uprising 
had  already  begun,  took  sides  with  the  patriots  and 
quickly  rose  to  the  command  of  their  forces.  Province 
after  province  was  liberated  in  Venezuela  by  fighting 
that  spared  neither  wounded  nor  prisoners  on  either  side. 
Bolivar  became  dictator  of  his  own  country,  and  freed 
its  neighbor,  Colombia.  There  was  still  a  Spanish 
army  in  the  interior,  falling  back  into  Peru.     Here 


256       BUSINESS  IN  SOUTH  AMEEICA 

Bolivar  and  San  Martin  joined  forces  in  1823,  defeated 
tlie  royalists,  liberated  Peru  and  Bolivia,  and  established 
the  latter  as  a  separate  country,  of  which  Bolivar  was 
made  perpetual  president.  In  1827  he  retired  to 
Colombia,  and  while  contemplating  self-exile  to  the 
West  Indies  or  Europe  to  escape  the  persecution  of 
political  enemies,  died  in  that  country  of  tuberculosis 
in  1830. 

Jose  Artigas  was  perhaps  only  a  little  liberator  of  a 
little  country,  and  is  sometimes  treated  as  a  mere  foot- 
note in  summaries  of  South  American  history  in  our 
own  language.  But  he  freed  Uruguay,  and  Uruguay 
is  not  a  small  country  in  spirit,  and  Artigas  did  the 
job  with  an  impulsive  dash  that  makes  one  think  of 
him  in  connection  with  Bolivar,  San  Martin  and 
O'Higgins.  He  was  born  in  Montevideo  in  1764, 
served  as  officer  of  Uruguayan  Eough  Eiders  in  the 
Spanish  forces,  and  was  a  true  "caudillo"  or  guerilla. 
In  1811  the  Spanish  governor  accused  him  of  plunder- 
ing. He  raised  his  famous  Grito  de  Asencio,  or  cry 
of  freedom,  and  led  his  troops  over  into  Buenos  Aires. 
Eeturning  with  reenforcements  of  Argentines  as  well 
as  Uruguayans,  he  laid  siege  to  Montevideo  and  for 
several  years  fought  Spaniards,  Brazilians  and  Argen- 
tines, the  la*tter  because  they  wished  to  make  Uruguay 
a  proTsince  of  Argentina,  while  Artigas  had  a  clear 
vision  of  independence.  In  1813  he  practically  de- 
clared Uruguayan  independence,  adopted  the  title 
"Protector  of  Free  People,"  and  captured  Montevideo 
in  1814  with  the  aid  of  a  naval  force  from  Buenos  Aires 
under   the   Irish   Argentine   Admiral   Brown.     Some 


WHO  WAS  WHO  m  SOUTH  AMERICA    257 

years  later  he  was  defeated  by  a  combination  of  Bra- 
zilians and  Argentinos.  Discouraged,  lie  retired  to 
Paraguay,  where  he  was  received  by  the  Dictator 
Francia,  and  lived  there  until  his  death  in  1850.  Uru- 
guay's real  independence  w^as  won  from  Brazil,  and  is 
memorable  for  another  episode.  In  1825  word  came 
that  the  last  vestiges  of  Spanish  power  had  been 
broken  in  Peru,  and  the  Argentinos  naturally  held  a 
big  celebration.  This  was  so  sorrowful  an  occasion  for 
the  Uruguayans  in  Buenos  Aires,  reminded  of  their 
own  domination  by  the  Brazilian  empire,  that  a  band 
of  thirty-three  patriots,  the  famous  ''Treinta  y  Tres," 
led  by  Colonel  Juan  Antonio  LavaUeja,  started  for 
Uruguay  with  a  tri-colored  flag  bearing  the  motto, 
^'Liberty  or  Death."  Picking  up  another  handful  of 
patriots  they  took  a  small  town.  General  Fructuoso 
Rivera,  one  of  Artigas'  old  lieutenants,  being  then  in 
command  of  the  Uruguayan  army  under  the  Brazilians, 
was  sent  against  the  invaders,  but  promptly  joined 
them.  Whereupon  all  Uruguay  arose,  an  independent 
government  was  established  and  three  years  of  fighting 
followed.  Admiral  Brown  came  back  and  defeated  the 
Brazilian  fleet,  for  the  Argentine  government  became 
involved.  Finally  the  Brazilians  were  defeated  in  the 
chief  battle  of  this  war  on  the  plains  of  Ituzaingo,  and 
in  1828  both  Brazil  and  Argentina  acknowledged 
Uruguay's  independence. 

Bernardo  O'Higgins  was  the  liberator  of  Chile. 
Bom  in  that  countrv,  he  was  of  Irish  descent,  his 
father,  Ambrose  O'Higgins,  having  emigrated  from 
Erin  to  South  America,  fighting  and  working  his  way 


258       BUSINESS  IN  SOUTH  AMERICA 

up  until  lie  became  viceroy  of  Peru  under  the  Spanisli 
colonial  rule.  Bernardo  was  educated  in  South  Amer- 
ica and  Europe.  He  organized  a  band  of  soldiers  when 
Chile  began  her  struggle  for  independence,  and  soon 
won  a  reputation  for  bravery  in  battle,  as  well  as  wis- 
dom in  council.  But  he  was  eventually  defeated,  and 
retreated  with  a  following  of  patriots  to  Mendoza, 
where  San  Martin  was  organizing  his  Army  of  the 
Andes.  When  that  army  marched  into  Chile  through 
six  different  mountain  passes,  O'Higgins  was  in  charge 
of  the  reserve  force.  After  independence  had  been  pro- 
claimed he  became  Dictator  of  Chile,  formed  a  Navy 
under  the  command  of  Admiral  Cochrane,  a  Scotch- 
man, afterwards  a  British  Lord,  and  sent  him  north  to 
liberate  Peru.  Eour  thousand  Chilean  and  Argentine 
soldiers  were  transported  in  this  expedition,  and  Coch- 
rane and  San  Martin  began  operations  which  ultimately 
led  to  the  liberation  of  Peru  with  Bolivar's  help  in 
1824.  O'Higgins  was  a  strong-headed  liberal.  After 
independence,  Chile  was  full  of  factions.  Aristocrats 
opposed  his  liberality,  and  former  revolutionists  ac- 
cused him  of  despotism.  Calling  his  enemies  together, 
he  announced  that  he  would  resign  his  office  as  Eirst 
Director  of  the  Eepublic  rather  than  be  the  cause  of 
internal  strife.  Tearing  off  his  official  insignia,  he 
said,  "I  am  now  nothing  but  a  private  citizen."  He 
was  urged  to  resume  office  by  enemies  as  well  as  friends, 
but  refused,  and  died  in  exile.  A  long  period  of  fac- 
tional politics,  rising  to  civil  war  after  O'Higgins' 
retirement,  demonstrated  the  wisdom  of  his  rule. 
Admiral  Thomas  Cochrane  was  bom  in  Scotland, 


WHO  WAS  WHO  m  SOUTH  AMERICA    259 

and  became  a  British  naval  hero  in  the  wars  against 
IsTapoleon.  Courageous  and  outspoken,  he  offended  the 
corrupt  British  Admiralty,  and  after  imprisonment 
went  to  help  the  Chileans.  The  country  was  free  of 
Spanish  rule  when  he  arrived,  but  harassed  by  Spanish 
warships,  with  a  Spanish  stronghold  at  Valdivia.  With 
two  small  vessels  Cochrane  sailed  into  Valdivia  Bay, 
trusting  to  bad  Spanish  marksmanship  to  get  through 
— which  he  did.  Then  he  made  a  night  attack  on  the 
forts,  which  the  defenders  considered  impregnable,  and 
in  the  morning  they  had  been  captured.  After  that,  he 
proceeded  to  clean  up  the  Spanish  navy,  with  the  same 
success.  Cochrane  was  resourceful  in  war  devices, 
among  other  tilings  being  one  of  the  first  to  propose 
poison  gas,  using  sulphur  fumes  and  the  wind  to  make 
hostile  ships  and  forts  untenable.  His  habit  of  doing 
the  unexpected  thing  profoundly  worried  the  Spaniards. 
He  afterwards  became  Earl  of  Dundonald. 

Two  of  the  greatest  Chileans  deserve  a  word  or  two, 
although  they  were  not  concerned  with  its  struggles  for 
independence,  being  Araucanian  Indians,  and  real 
natives  of  the  country.  Of  all  the  wild  Indians  found 
in  the  Western  world,  the  Araucanians  of  Chile  were 
certainly  the  wildest — warlike,  passionately  devoted  to 
their  country,  and  unconquerable.  "Men  of  iron  with 
souls  of  tigers,"  the  Spaniards  called  them,  and  after 
death  their  warriors'  bodies  were  burned  in  the  belief 
that  the  xiraucanian  warrior  might  thereby  rise  to  the 
clouds  and  continue  fighting  dead  Spaniards.  These 
liberty-loving  people  produced  two  chiefs  who  ranked 
as  first-class  generals.     Caupolican  was  first  to  oppose 


260       BUSINESS  IN  SOUTH  AMERICA 

the  invaders  after  Santiago  had  been  established  by  the 
Conquistador  Valdivia.  He  was  a  mature  strategist, 
who  learned  rapidly  from  the  Spaniards  in  battle,  dis- 
carding bows  for  pikes^  adopting  regimental  organiza- 
tion, and  capturing  horses  which  were  bred  for  cavalry. 
His  story  has  been  immortalized  in  the  Chilean  epic 
''La  Araucana,"  by  Alonso  de  Ercilla,  a  Sponiard  who 
fought  against  him.  Lautaro  was  an  Araucanian  mili- 
tary genius  who  outmaneuvered  the  Spaniards,  fooled 
them  with  camouflage  devices  like  dummy  reserves  of 
boys  and  women  with  poles,  and  finally  conquered  and 
killed  Valdivia,  falling  in  battle  himself  when  only 
twenty-two.  Although  it  took  nearly  three  centuries  of 
fighting  to  practically  destroy  the  Araucanians,  of  no 
part  of  their  national  history  are  the  Chileans  more 
proud  to-day.  The  single  star  on  Chile's  flag  is  the 
Araucanian  national  symbol. 

Francisco  de  Miranda  might  be  called  "the  Tom 
Paine  of  the  South  American  revolution."  Bom  in 
Venezuela  in  1Y56,  at  sixteen  he  was  fighting  the  Moors 
as  a  captain  in  the  Spanish  army.  Our  revolution 
found  him  in  Cuba,  as  a  Spanish  officer,  taking  part  in 
an  attack  upon  the  British  dominions  of  Florida  and 
the  Bahama  Islands.  By  1783  he  had  become  a  revo- 
lutionary propagandist,  roving  the  earth  to  get  support 
for  his  plans  to  break  Spanish  rule  in  America.  He 
knew  Thomas  Paine,  Alexander  Hamilton,  and  perhaps 
met  Washington.  The  United  States  minister  in  Lon- 
don was  an  enthusiastic  champion  of  his  schemes.  He 
worked  upon  the  British,  French  and  American  gov- 
ernments, and  penetrated  even  to  Russia,  where  the 


WHO  WAS  WHO  m  SOUTH  AMERICA   261 

Great  Catlierine  gave  him  a  purse  of  gold.  In  1806 
he  led  an  unsuccessful  filibustering  expedition  against 
Venezuela  from  the  United  States.  When  his  native 
country  was  finally  freed  from  Spain,  the  patriots 
themselves  threw  him  into  prison  as  a  traitor,  handed 
him  over  to  the  Spanish  authorities,  and  he  died  in 
prison  in  1816.  His  life  was  in  some  ways  the  most 
romantic  of  the  revolutionary  period.  To  this  day 
South  American  scholars  disagree  as  to  whether  he  was 
an  exalted  patriot  or  a  paid  spy.  But  he  was  a  prince 
of  filibusters,  an  unquenchable  preacher  of  South 
American  independence,  and  one  of  its  founders. 

Mariano  Moreno,  born  in  Buenos  Aires  in  1778,  was 
the  Thomas  Jefferson  of  Argentino  independence — its 
literary  man.  When  the  first  steps  toward  freedom 
were  taken  by  an  assembly  in  Buenos  Aires,  he  became 
editor  of  a  newspaper  that  was  founded  as  the  official 
organ,  and  also  founded  the  Argentino  national  library. 
He  believed  that  the  pen  was  as  necessary  as  the  sword, 
and  that  if  the  ideas  behind  the  revolution  were  not  put 
clearly  before  the  people,  the  revolution  would  fail. 
In  spreading  the  ideas  he  did  priceless  service.  Sent 
to  England  on  a  diplomatic  mission,  Moreno  died  at 
sea  in  1811. 

Manuel  Belgrano  was  another  Argentino  prominent 
in  the  revolution  that  set  that  country  free.  Bom  in 
1770,  he  first  distinguished  himself  as  a  soldier,  leading 
an  armv  of  voun^:  men  in  the  defense  of  Buenos  Aires, 
and  later  a  gauclio  force  in  the  northern  provinces. 
Then  the  Spaniards  defeated  him,  and  he  turned  to 
politics   and  teaching.      Under   Moreno's   far-reaching 


262     BUsmEss  i:^r  south  ameeica 

scheme  of  education  lie  became  director  of  the  national 
institute  of  mathematics.  But  his  greatest  service  was 
in  1816,  when  a  congress  of  representatives  from  the 
provinces  fighting  for  liberty  met  at  Tucuman.  Bel- 
grano  is  credited  with  the  speech  that  led  to  Argentina's 
declaration  of  independence  at  that  congress. 

Antonio  Jose  de  Sucre,  born  in  1795,  a  Venezuelan, 
was  the  youngest  of  all  the  liberators^ — so  young  that 
he  grew  up  in  the  midst  of  revolutionary  fighting,  and 
was  an  engineer  ofiScer  at  sixteen.  His  nature  was  so 
fine  and  his  ability  so  great  that  Bolivar,  his  chief,  said 
that  if  God  gave  men  the  right  to  select  members  of 
their  own  family,  he  would  select  Sucre  for  a  son. 
He  was  commander  in  chief  at  the  decisive  battles  of 
Junin  and  Ayacucho,  which  won  Peru,  the  last  Spanish 
stronghold.  Upper  Peru  was  then  formed  into  the  sep- 
arate republic  of  Bolivia,  named  after  Bolivar,  with  its 
capital  city  bearing  the  name  of  Sucre.  The  latter 
was  made  first  president  of  Bolivia,  but  soon  retired  to 
Colombia,  weary  of  the  political  squabbling  that  fol- 
lowed liberation.  He  was  assassinated  in  1830,  mys- 
teriously, probably  for  political  motives. 

Jose  Rodriguez  de  Francia  is  best  known  as  Hr. 
Erancia,  the  tyrannous  dictator  of  Paraguay,  but  he 
was  among  the  liberators,  nevertheless,  and  may  be  re- 
garded as  a  liberator  who  afterwards  went  wrong. 
Born  about  1761,  he  was  fifty  years  old  when  a  pro- 
visional government  in  Paraguay  decided  to  "suspend 
recognition"  of  Spain.  Policy  toward  Spain  was  then 
discussed.  It  is  said  that  Erancia  laid  two  loaded 
pistols  on  the  table,  declaring  those  were  his  arguments 


WHO  WAS  WHO  m  SOUTH  AMERICA    263 

against  Spain.  He  called  a  congress,  put  through  a 
plan  of  government,  declared  Paraguay  independent, 
and  then  became  its  dictator  for  life.  His  ability  and 
cruelty  made  him  one  of  the  outstanding  figures  in 
South  American  history.    He  died  in  1840. 

During  all  the  stirring  times  when  Spanish  America 
was  winning  independence,  Brazil  went  on  placidly  as 
a  Portuguese  colony.  There  was  apparently  no  revolt 
in  its  temperament.  Yet  in  reality  the  stage  was  being 
set  even  then  for  the  bloodless  revolution  of  1889,  when 
the  empire  was  turned  into  a  republic  by  the  signing 
of  a  paper  or  two,  and  old  Dom  Pedro  II j  the  Emperor 
who  was  so  friendly  to  the  United  States,  went  into 
exile. 

Napoleon  really  started  Brazil  toward  independence, 
indirectly.  Portugal  was  friendly  to  England  in  the 
Napoleonic  wars.  The  French  invaded  that  country. 
Dom  Joao,  King  of  Portugal,  took  refuge  in  Brazil  in 
1808,  setting  up  his  court  at  Rio  de  Janeiro,  where  he 
stayed  thirteen  years.  At  a  distance,  the  Portuguese 
King  had  compelled  the  Brazilians  to  trade  with  the 
mother  country  alone,  excluded  foreigners  and  pro- 
hibited printing  presses  and  newspapers.  On  the  spot, 
he  acquired  such  a  love  for  Brazil  that  ships  of  all 
friendly  countries  were  admitted  to  her  ports,  a  news- 
paper started,  foreign  merchants  and  capital  invited. 

When  Dom  Joao  YI  sailed  home  in  1821  he  left  his 
son  in  Brazil — Dom  Pedro  7.  The  Portuguese  legisla- 
ture wanted  to  put  the  commercial  blinders  on  the 
colony  again,  and  Dom  Pedro  was  ordered  home.  But 
his  partiality  for  Brazil  was  so  strong  that  he  disobeyed, 


264       BUSmESS  IN  SOUTH  AMERICA 

declared  Brazilian  independence  in  1822,  was  pro- 
claimed Emperor,  and  ruled  for  nine  years.  Then  he 
abdicated  in  favor  of  Dom  Pedro  II,  five  years  old. 

After  attaining  manhood,  this  ruler,  afterwards  the 
"old  Emperor"  of  our  time,  ran  the  country  imperially, 
and  like  a  scholar  and  a  gentleman.  He  was  the 
greatest  Brazilian,  and  a  great  man.  He  built  rail- 
roads and  cities,  developed  coffee  and  rubber,  invited 
settlers  and  capital.  In  1854,  he  forbade  the  bringing 
of  more  slaves  into  the  country,  but  it  was  not  until 
1888,  while  he  was  sick,  that  his  daughter.  Princess 
Isabel,  as  Regent,  under  compulsion,  signed  a  decree 
abolishing  slavery. 

This  decree  kicked  up  a  fine  row.  ISTegroes  left  the 
fields  and  flocked  to  the  cities,  and  planters  began 
agitating  against  the  empire.  Dom  Pedro  was  old,  and 
had  no  son,  and  his  daughter's  husband  was  a  French- 
man, so  there  were  fears  of  European  aggi^ession.  A 
republic  was  proclaimed,  and  the  old  Emperor  notified 
that  he  must  leave  Brazil  within  twenty-four  hours. 
He  went  with  his  family  to  Portugal,  leaving  Brazil  his 
last  blessing,  and  the  republic  dates  from  !N"ovember 
15,  1889. 

In  the  beginning  there  were  really  three  separate 
Brazils.  Pizarro  led  the  Spanish  into  South  America 
through  Peru,  where  they  were  so  busy  gathering  Inca 
gold  and  Colombian  emeralds  that  the  eastern  half  of 
the  continent,  without  a  civilization  to  loot,  was  over- 
looked. A  Spaniard  found  the  country  first — Pinzon, 
one  of  Columbus'  companions,  in  1500 — but  his  disr 
covery  aroused  no  interest  in  Spain.     Three  months 


WHO  WAS  WHO  m  SOUTH  AMERICA    265 

later,  Captain  Pedro  Cabral,  with  a  Portuguese  fleet, 
sailed  into  a  Bahia  harbor,  and  Portugal  claimed  the 
country    and   began   colonizing    it.     First   settlements 
were  made  in  the  north  ai'ound  Eahia  and  Pernambuco, 
and  in  the  south  around  Rio  de  Janeiro  and  Sao  Paulo. 
Sugar  was  cultivated  in  the  north  with  iVfrican  slaves, 
and  general  crops  in  the  south  witli  Indians.     Then  the 
French  tried  to  establish  themselves  at  Rio  de  Janeiro, 
and    the    Portuguese    expelled    them,    found    mineral 
wealth  in  what  is  now  the  state  of  Minas  Geraes  (which 
means  "general  mines"),  and  so  three  distinct  Brazils 
came  into  being.     The  north  grew  rich  on  sugar,  de- 
veloped thinkers  and  winters,   and  also  warriors  who 
resisted  attempts  of  the  Dutch  and  English  to  seize 
their  country.    Within  sixty  years  after  the  fii^t  settle- 
ment the  men  who  defeated  the  French  proudly  pro- 
claimed themselves  Brazilians,  not  Portuguese,  the  first 
bubbling  up  of  Brazilian  nationality.     In  the  south  the 
discovery  of  gold  developed  the  hardy  Paulistas,  who 
explored  the  hills,  fought  the  Indians,  and  developed 
the  country.     They  also  developed  a  literature  and  a 
national  feeling.     Rio  de  Janeiro  turned  to  mining, 
and  likewise  called  itself  Brazilian.    From  time  to  time 
in  early  Colonial  days  there  were  guerilla  wars  between 
different  sections  and  classes,  and  repeated  plots  and 
revolts  for  independence.    Each  of  these  little  wars  was 
fought  ''for  Brazil,"  but  that  meant  the  particular  lo- 
cality fought  about,  not  all  Brazil.    It  took  a  couple  of 
centuries  of  jogging  around  a  country  so  big  to  even 
begin  to  see  it  whole.     Some  of  the  Colonial  characters 
are  worth  knowing  because  they  reflect  the  character 


266       BUSINESS  IN  SOUTH  AMEEICA 

of  Brazil,  and  bring  the  country  closer  to  us  humanly. 

"Pocahontas''  is  the  first  historical  figure  in  Brazil, 
appearing,  not  once,  but  repeatedly,  for  the  Portuguese 
married  the  daughters  of  Indian  chiefs.  Both  Bahia 
and  Sao  Paulo  were  founded  by  men  who  took  Indian 
wives,  and  one  Indian  named  Tebyriga  has  left  a  most 
pleasant  memory  in  Brazilian  history  because  he  aided 
the  settlers  against  hostile  tribes.  His  daughter  mar- 
ried a  Portuguese,  and  their  many  children,  the  first 
mamelucoSj  founded  a  mixed  race  which  is  credited 
with  winning  for  Brazil  the  states  of  Minas  Geraes, 
Goyaz  and  Mat  to  Grosso,  one  third  Brazil's  territory. 
The  chief  street  in  Sao  Paulo  still  follows  a  line  of 
Indian  cabins  built  by  Tebyriga  to  guard  the  settle- 
ment against  hostile  Indians. 

Lorrenco  de  Albuquerque  MaranJiao  was  Brazil's 
first  general.  Born  in  1548,  the  son  of  an  Indian 
woman  and  a  Portuguese,  his  grandfather  was  a  famous 
Indian  named  Arco-Yerde.  Growing  up  in  an  Indian 
village  but  learning  to  read  and  write  Portuguese,  he 
was  fighting  hostile  tribes  when  only  eighteen.  His 
descendants  to-day  form  one  of  the  largest  and  most 
important  families  in  north  Brazilian  territory  that  he 
conquered.  The  King  of  Portugal  made  him  a  noble- 
man and  captain  of  the  colony,  but  he  was  prouder  of 
being  Arco- Verde's  grandson.  In  1614,  he  found  the 
French  invading  Maranhao,  and  with  greatly  inferior 
forces  defeated  them  and  their  Indian  allies,  expelling 
them  from  the  country. 

Andre  Vidal  de  Negreiros  was  another  Brazilian 
general,  responsible  for  expelling  the  Dutch  invaders. 


WHO  WAS  WHO  IN  SOUTH  AMERICA   267 

He  was  a  white  man,  bom  in  Brazil  about  1600,  and 
in  defeating  the  Diit<?h  had  two  captains,  Camarao,  an 
Indian,  and  Henrique  Dias,  a  negro.  Portugal  did  not 
want  the  Dutch  disturbed,  and  had  an  agreement  for 
their  occupation  of  Pernambuco.  Negreiros  had  helped 
found  Bahia.  He  went  to  Pernambuco  in  1645,  or- 
ganized an  insurrection,  headed  an  insurgent  army,  and 
after  nine  years  of  constant  fighting,  in  which  he  won 
many  battles  with  inferior  forces,  finally  drove  the 
Dutch  from  their  last  stronghold,  and  out  of  Brazil. 

BarthoJomen  de  Giismao,  the  'Tlying  Priest," 
rouses  Brazilian  pride  because  he  is  credited  with  the 
invention  of  the  balloon  before  the  Montgolfier  brothers. 
Bom  in  Santos,  Brazil,  in  1685,  he  went  to  Portugal 
and  was  educated  for  the  priesthood,  becoming  chap- 
lain of  the  King  in  Lisbon.  Investigating  physics,  he 
believed  it  possible  to  '^fly  like  the  birds."  Dom  Joao 
V,  liking  the  idea,  provided  money  for  Gusmao's  first 
flying  machine.  On  August  5,  1709,  he  made  his 
first  and  only  demonstration,  rising  from  the  ground 
to  the  second  story  of  the  palace  and  descending  again 
smoothly.  Superstition  credited  this  invention  to  the 
devil,  and  Father  Gusmao  eventually  died  miserably 
in  Spain. 

0  Tiradenies,  or  the  "tooth  puller/'  was  the  nick- 
name of  Joaquim  Jose  da  Silva  Xavier,  a  clever,  good- 
hearted  fellow  of  no  definite  trade.  Bom  in  1748,  in 
the  State  of  Minas,  he  became  a  militia  officer,  a 
peddler  and  a  prospector,  finally  turning  tooth  puller. 
Minas  was  a  very  prosperous  state  until  its  mines  gave 
out,   when  Portuguese  taxation   stimulated   a  plot   to 


268       BUSmESS  m  SOUTH  A]\IEEICA 

« 

make  it  an  independent  republic,  in  1Y90.  The  plotters 
were  good  politicians,  but  afraid  of  leadersliip.  Tira- 
dentes  was  popular,  and  a  ready  talker.  He  was  made 
leader,  and  quickly  arrested  through  his  guilelessness, 
and  when  tried  took  full  responsibility,  maintaining 
strict  secrecy  concerning  his  companions.  The  Bra- 
zilians love  the  memory  of  Tiradentes  because,  through 
his  sublime  self-sacrifice  during  his  trial,  he  alone  was 
hung,  and  the  real  conspirators  went  unpunished.  He 
was  representative  of  the  many  revolutions  in  Brazil 
during  colonial  days  which  have  been  ignored  in  the 
histories  by  Portuguese  writers. 

Fernando  Dias  Leme  lives  in  Brazilian  history  as 
the  "Emerald  Chaser."  Having  found  gold,  the  Por- 
tuguese expected  that  their  colony  would  also  yield 
emeralds,  like  the  Spanish  colonies.  Leme  headed  an 
expedition  to  find  an  emerald  mine  shown  on  a  map  left 
by  a  dead  prospector,  starting  out  when  he  was  eighty 
years  old.  He  actually  found  some  gi'een  stones,  which 
were  tourmalines,  not  emeralds,  and  dying  in  the 
wilderness,  left  these  to  his  son  in  all  faith  that  he  had 
found  the  desired  gems.  One  good  story  told  about 
him  is  that,  seeing  Indians  wearing  gold  ornaments,  Jie 
asked  where  they  got  the  metal,  and  when  they  refused 
to  tell,  poured  out  a  dish  of  rum,  set  fire  to  it,  and 
threatened,  "If  you  don't  tell  me  where  you  get  gold 
I'll  burn  all  the  rivers."  Leme's  real  service  to  Brazil 
was  as  an  explorer,  for  in  his  search  for  emeralds  he 
discovered  and  opened  up  immense  territory.  He  died 
in  1672. 


CHAPTEE  XX 

THE  CANAL  ZONE— A  SAMPLE  OF  US 

ITame — Huggins.  Species — British.  Variety — • 
Quiet,  very  quiet,  tlie  kind  to  whose  statements  you 
add  the  discount. 

The  last  job  they  gave  him  as  an  engineer  in  the 
construction  force  was  leveling  a  tropical  forest  near 
Gatun  locks,  where  ships  would  need  a  mooring  ground 
after  the  water  was  turned  in.  It  would  have  taken 
months  to  chop  the  trees  down,  so  Huggins  blew  them 
up  with  dynamite.  He  blew  them  up  in  blocks,  a 
glorious  Fourth-of-July  business.  Then  he  went  away, 
and  war  came,  and  five  years'  soldiering  and  roving 
passed  before  he  found  himself  going  through  the 
finished  Canal  on  a  British  liner. 

Huggins  had  resolved  to  say  nothing  about  his  pre- 
vious acquaintance  with  the  Canal — didn't  think  that 
would  be  particularly  interesting  to  other  people. 

But  thev  were  lifted  silentlv  through  the  Atlantic 
locks,  enormous  and  complete,  even  to  an  engineer. 
They  steamed  out  onto  Gatun  Lake,  a  giant  ocean 
vessel  crossing  a  continental  divide  through  a  Louis- 
iana bayou,  in  effect,  for  the  dead  trees  stretched  away 
for  miles  on  either  side.  Over  in  a  pasture  rose  some- 
thing  white — it   was    a    Canal    lighthouse.      Huggins 

269 


270       BUSmESS  m  SOUTH  AMEEICA 

saw  his  mooring  ground,  under  water.  Here  lie  had 
had  a  steam  shovel  job.  There  he  had  relocated  a  sec- 
tion of  the  railroad,  and  over  yonder  razed  a  village. 
Everything  had  changed  magically,  the  old  things  so 
utterly  gone,  and  the  new  things  of  such  magnitude. 
Huggins  began  to  talk  about  it. 

"And — my  word!"  he  confessed  afterwards,  "do 
you  know  that  presently,  without  realizing,  I  was  in- 
flicting on  those  good,  helpless  people  a  comprehensive 
lecture  on  the  Panama  Canal!" 

While  the  dirt  flew,  the  Canal  was  very  much  in  the 
American  imagination. 

Then  came  the  time  when  we  said,  "Well,  it^s  done, 
ain't  it — what  next  ?"  And  the  next  was  war,  in  which 
the  Canal  dropped  out  of  sight.  Taking  advantage  of 
forgetfulness,  jN'ature  transformed  it  with  tropical 
jungle. 

Toward  the  end  a  Washingi;on  inspection  party  rode 
through  with  General  Goethals.  They  came  to  a  gap 
between  high  hills  clothed  in  verdure  that  looked  as 
though  it  might  have  been  there  since  Balboa  and 
Pizzaro. 

"General,  you  were  fortunate  in  having  this  natural 
opening  here,"  said  a  Congressman. 

"Well — yes,"  was  the  reply,  "but  this  is  Culebra 
cut,  you  know!" 

If  you  dropped  down  to  the  Canal  Zone  for  a  winter 
vacation,  leaving  ISTew  York  or  Chicago  snowbound,  it 
may  not  strike  you  as  being  so  very  unusual.  It  is  so 
much  like  home  that  some  Americans  complain  of  the 
sameness.    Where  is  the  color  of  Latin  America  ?    They 


THE  CA^AL  ZOXE— A  SAMPLE  OF  US     271 

find  the  palms,  cocoanuts  and  bananas  most  interesting, 
because  different. 

But  if  you  come  up  the  other  way,  after  eight  months 
in  South  American  countries,  you  will  see  it  in  a  differ- 
ent aspect.  Latin  American  color!  You  will  have  it 
in  the  shape  of  flea  bites  from  Lima,  and  maybe  a  touch 
of  malaria  from  that  last  night  in  Callao,  and  memo- 
ries of  the  dust  of  Chile,  the  flies  of  Argentina,  and  the 
abounding  insect  life  of  Brazil.  For  more  than  half  a 
year  you  have  been  ordering  queer  dishes  in  queer 
hotels  with  your  first  primer  Spanish,  and  you  want  a 
letter  of  introduction  to  a  genuine  steak.  You  will  see 
the  Canal  Zone  with  double  vision — that  of  the  Yankee 
viewing  his  own  civilization  with  a  fresh  eye,  and  also 
viewing  it  approximately  through  the  eye  of  the  Latin 
American. 

Eead  into  these  impressions  no  suggestion  that  Latin 
American  ways  or  views  are  inferior  to  our  own.  They 
are  simply  different,  due  to  differences  in  temperament 
and  conditions.  What  we  want  to  grasp  is  the  effect 
upon  the  Latin  American  of  that  sample  of  US  which 
is  the  Canal  Zone. 

It  is  astonishingly  representative,  as  a  sample — a 
ten-mile  strip  of,  say  the  Middle  West,  picked  up  by  a 
jinni  and  set  down  where  the  Latin  American  can  see 
it,  like  a  permanent  exposition.  He  goes  through  it  on 
his  way  to  Xueva  York  and  Europa.  Always  frank  in 
his  admiration  of  our  energ;\',  and  material  comfort, 
and  our  big  way  of  doing  things,  he  has  said,  ^'Yes, 
but  in  your  temperate  climate  such  achievements  are 


272       BUSINESS  IN  SOUTH  AMEKICA 

possible."  Now  lie  finds  the  trick  done  right  in  the 
tropics,  less  than  ten  degrees  from  the  equator. 

It  is  not  only  the  Canal  itself.  That  is  big  and  im- 
pressive in  its  engineering  and  operation.  As  the 
Latin  American  rides  through,  and  sees  his  ten- 
thousand-ton  liner  lifted  up  and  sucked  down  by  the 
locks  like  a  toy  boat,  you  can  feel  the  mental  change 
taking  place  inside  him.  Being  supersensitive  to  im- 
pressions, it  is  a  transformation  bordering  on  the 
spiritual.  But  Hog  Island  would  hit  him  just  as  hard, 
or  New  York  subways,  or  the  Chicago  stockyards,  or 
Massachusetts  motor  roads. 

The  real  sample  of  us  is  the  Zone,  because  there  is 
the  national  spirit  that  built  the  Canal. 

The  latter  is  finished,  but  the  Zone  goes  on. 

The  Canal  is  machinery,  but  the  Zone  is  human. 

Coming  up  from  the  south,  you  watch  your  Latin 
American  friend  to  see  what  he  thinks  about  it  all.  He 
has  been  quick  to  ask  what  you  think  about  his  country. 
Now  you  want  to  see  what  he  has  to  say  about  this 
sample  of  yours.    Fair  enough ! 

For  half  a  year  you  have  been  jiggling  around  his 
republics  on  narrow  gauge  railroads  of  the  European 
type — British,  French  and  German  locomotives, 
skimpy  passenger  carriages,  little  goods  wagons  of 
motor  truck  capacity,  and  all  the  rest  of  it.  He  has 
given  monopolies  and  borrowed  millions  to  get  these 
roads.  The  only  trans-continental  line  in  South  Amer- 
ica has  three  different  gauges  and  involves  two  changes 
of  cars  in  the  forty-hour  run  from  Buenos  Aires  to 
Valparaiso.     Trains  stop  at  sketchy  stations  and  wait 


THE  CAJSTAL  ZONE— A  SAMPLE  OF  US     273 

five,  ten,  fifteen  minutes  while  conductor  and  station 
agent  chat.  When  all  the  courtesies  have  been  obseiTed 
the  conductor  blows  a  police  whistle,  the  station  agent 
strikes  a  bell,  Ding!  the  conductor  shouts  Vanios! 
(go)  and  jou  are  off  again  at  the  reckless  speed  of 
fifteen  miles  an  hour.  On  main  routes,  with  a  dining- 
car  that  is  a  lounge  and  bar  as  well,  you  can  be  com- 
fortable. On  other  routes  you  had  better  take  your 
own  provisions.  And  after  that  it  is  a  case  of  traveling 
by  horse  or  mule.  The  Latin  American  lives  on  a  con- 
tinent much  like  our  own  West  after  the  Civil  War. 
He  is  working  to  develop  it,  but  this  is  as  far  as  he  has 
got. 

When  the  steamer  ties  up  at  Cristobal  you  take  the 
railroad  back  to  the  Pacific  side  to  see  the  Canal  from 
another  angle.  The  train  is  a  real  American  train,  the 
cars  standard  American  passenger  coaches,  the  con- 
ductor a  democrat  from  the  Corn  Belt.  By  its  velocity, 
weight  and  mass  you  feel  that  it  is  an  American  train 
the  moment  you  shoot  out  of  the  station.  Everybody 
talks  American  except  the  negi^o  section  hands,  who 
talk  Jamaican  and  Barbadian,  which  are  like  English 
if  they  don't  talk  too  fast.  Big  American  freight  cars 
stand  on  the  siding.  Six  of  them  would  haul  the  aver- 
age South  American  trainlo?.d  of  freight  out  of  a  coffee 
or  cattle  region,  where  freight  rates  are  so  high,  on  the 
European  philosophy  of  traffic,  that  only  the  most 
valuable  commodities  can  be  shipped.  You  land  in 
Panama  City,  fifty  miles,  in  an  hour  and  three  quarters. 

At  home,  your  Latin  American  friend  lives  in  a  fine 
old  Spanish  mansion,  built  around  a  patio,  or  inner 


274       BUSmESS  IN  SOUTH  AMEEICA 

courtyard.  Spanisli  architecture  has  not  only  the  merit 
of  beauty,  but  the  older  it  gets,  and  the  more  you  knock 
it  to  pieces,  the  better  it  looks.  Even  in  the  conven- 
tillos,  or  tenements,  the  patio  is  gay  with  flowers.  But 
it  is  a  style  of  architecture  not  suited  to  those  countries, 
too  chilly  in  temperate  climes,  too  massive  in  the 
tropics,  too  easily  shaken  down  in  earthquake  areas. 
So  the  Latin  American  is  now  copying  our  cottages  and 
bungalows  from  our  magazines.  In  the  Zone  he  sees 
the  Yankee  engineer's  idea  of  a  tropical  house.  Frame 
construction  on  pillars  eight  feet  above  'the  ground  to 
let  cooling  air  beneath  and  keep  out  pests.  The  patio 
of  old  Spain  is  there,  but  turned  into  broad  veranda 
and  run  around  the  outside,  with  shrubbery  to  give 
the  privacy  for  which  the  patio  is  valued. 

Outside  of  the  cities  there  is  hardly  500  miles  of 
good  road  in  all  South  America.  Your  friend  steps 
into  a  taxi,  and  in  a  moment  is  skimming  over  macadam 
and  cement  blanketed  with  asphalt,  so  smooth  that  he 
could  play  billiards  on  it  if  level. 

Probably  the  hotel  problem  at  home  has  never 
bothered  him,  because  he  lives  between  his  residence 
and  his  clubs.  But  it  is  a  problem  to  the  visitor,  the 
single  ramshackle  hostelry  in  the  average  South  Ameri- 
can capital,  without  private  baths,  water  that  may  be 
warm  but  never  hot,  a  monotonous  sameness  of  meals 
— all  at  !N"ew  York  prices  plus.  Apart  from  Buenos 
Aires,  there  is  no  restaurant  life.  Just  one  new  hotel 
has  been  built  in  South  America  the  past  ^yq  years. 
The  best  hotel  on  the  continent  is  a  government  enter- 
prise of  the  littlest  country — the  Parque  at  Montevideo. 


THE  CANAL  Z0:N^E— A  SAMPLE  OF  US    275 

Uncle  Sam's  two  hotels  in  the  Zone  would  be  classed 
as  summer  resorts  at  home,  but  the  hot  water  is  really 
hot,  the  menu  adds  tropical  specialties  to  American 
variety,  and  there  is  hotel  life.  The  latter  appeals  to 
the  Latin  American  at  once.  He  finds  the  meals,  danc- 
ing and  pretty  girls  very  much  to  his  taste — a  fore- 
glimpse  of  what  he  has  been  told  to  expect  in  N'ueva 
York.  His  wife  and  daughters  walk  out  of  the  cage 
of  convention.  They  are  on  hand  early  every  evening, 
and  stay  till  late,  and  each  night  wear  different 
Parisian  toilets  to  show  their  appreciation  of  this  new 
atmosphere. 

There  is  comfort.  Wait  until  his  Seiiora  comes  back 
from  'New  York,  and  hear  her  appreciation  of  our  com- 
pact apartment,  which  eliminates  servants,  and  steam 
heat,  and  oceans  of  hot  water  day  or  night,  and  abun- 
dant ice,  and  elevators,  and  vacuum  cleaners,  and 
electrical  devices,  and  all  the  other  things  that  you 
probably  take  for  gi-anted.  The  very  fly  screens  in  the 
Zone  are  wonderful  to  her — a  single  village  of  em- 
ployees' tenements  has  more  fly  screen  than  you  will 
find  in  all  of  South  America.  And  there  is  sanitation, 
with  a  standard  of  health  in  a  former  tropical  plague 
spot  that  has  set  Latin  America  cleaning  up  its  high 
disease  and  death  rate  on  Canal  Zone  lines,  under  Canal 
Zone  experts. 

Eive  minutes'  walk  bevond  the  line  into  Panama 
City  shows  what  the  Yankee  idea  can  accomplish  in  a 
typical  Latin  iVmerican  to\^Ti.  The  picturesque  Spanish 
architecture  has  not  been  disturbed,  but  pure  water, 
sewers,    pavements    and    the    filling    of    surrounding 


276       BUSINESS  IN  SOUTH  AMEEICA 

swamps  have  eliminated  yellow  fever  and  malaria, 
along  witli  mosquitoes — even  flies  are  scarce.  Ten-cent 
taxicabs  whirl  you  through  streets  that  were  formerly 
fit  only  for  mule  carts.  It  is  said  that  before  the  com- 
ing of  the  Americans  there  were  only  half  a  dozen  pri- 
vate carriages  in  the  town.  From  the  standpoint  of 
Old  Panama,  Huggins  said,  riding  in  a  motor  through 
its  narrow  streets  seemed  as  wonderful  to  him  as  air- 
planing  in  the  Rockies. 

The  Zone  itself  is  one  big  American  suburb. 

The  Canal  pilot  dropping  off  a  New  Zealand  warship 
at  his  home  town  of  Gatun,  at  five  o'clock,  remembers 
to  stop  and  get  some  butter  at  the  commissary,  and 
the  children  are  out  watching  for  Dad.  His  neighbor, 
Smith,  of  Locks  Operation,  anxiously  asks  when  he  can 
get  one  of  those  folding  baby  carriages,  and  is  told  that 
they  are  "on  requisition."  The  commissary  might 
have  been  brought  from  Harlem  or  Englewood  on  a 
magic  carpet,  a  wonderland  of  shiny  devices  for  the 
sanitary  keeping  and  selling  of  food,  in  such  contrast 
to  the  dingy  shops  and  dirty  public  markets  of  the 
Southern  continent.  The  ^ve  o'clock  train  pulls  in  and 
lets  off  half  a  coachload  of  miscellaneous  Daddies  from 
Cristobal,  who  are  welcomed  by  waiting  wives  and 
kiddies.  Other  miscellaneous  Daddies  get  aboard  for 
Ancon  and  way  stations.  "Commuting  from  the  Atlan- 
tic to  the  Pacific,"  as  it  is  put  tersely  by  an  engineer 
who  does  it  six  days  a  week. 

When  the  Spaniards  wanted  a  name  they  took  one 
out  of  the  Saint's  calendar.  "Pedro  Miguel"  is  an  old 
place  name  in  the  Zone — short  for  Saint  Peter  Michael. 


THE  CANAL  ZONE— A  SAMPLE  OF  US    277 

It  has  stuck  to  a  lock  and  a  dam.  But  Saint  Peter 
Michael  would  hardly  recognize  himself  nowadays,  be- 
cause Zone  people  refer  to  him  familiarly  as  ''Peter 
Magill,"  and  this  is  merely  one  of  the  outstanding  Com 
Belt  liberties  taken  with  the  beautiful  language  of 
Cervantes. 

In  Panama  City  practically  everybody  speaks  Eng- 
lish, having  caught  it  from  the  Yankees.  The  latter 
know  just  about  enough  Spanish  to  get  into  a  tangle 
with  a  taxi  driver.  In  Porto  Pico,  one  of  our  depen- 
dencies, we  have  been  insistent  about  teaching  English 
to  the  children  in  the  schools.  That  has  been  an  irrita- 
tion, skillfully  utilized  by  agitators,  and  English  is 
seldom  heard  among  the  Porto  Ricans.  But  in 
Panama,  where  there  has  been  no  compulsion,  the 
people  have  learned  our  language  voluntarily. 

In  many  ways  the  Zone  is  more  American  than  New 
York,  which  has  always  stood  for  our  country  with  the 
Latin  American,  who  sticks  there  closely  during  his 
visits,  and  comes  away  with  impressions  of  cabarets, 
show  girls  and  night  life.  In  New  York  he  sees  our 
provinces  at  play.  But  in  the  Canal  Zone  he  sees  them 
at  work.  Two  thino^s  we  have  done  in  recent  vears  to 
set  him  thinking  about  us  in  a  more  kindly  way.  One 
was  digging  the  Canal,  and  the  other  our  participation 
in  the  war.  The  war  is  over,  but  in  the  Canal  Zone  he 
feels  the  spirit  and  sees  the  big-scale  methods  that  won 
the  war — unless  evervbodv  won  it. 

'T)o  they  really  like  us  in  Latin  America?"  we  are 
constantly  asking  ourselves. 

It  all  depends.    The  Latin  American  who  has  visited 


278       BUSINESS  IN  SOUTH  AMEEICA 

the  United  States  likes  us  because  lie  knows  sometliing 
about  us.  If  be  bas  been  educated  in  our  scbools  or 
colleges  (and  more  young  folks  are  coroang  to  tbem 
every  year  from  tbe  Soutbern  Republics)  be  may  like 
us  so  mucb  tbat  be  stays  in  tbe  United  States.  It  is 
one  of  tbe  sorrows  of  tbe  Latin  American  family  tbat, 
baving  sent  young  Juan  to  scbool  or  business  in  our 
country,  be  never  comes  back,  or  doesn't  stay,  because 
tbe  energy  and  bigness  of  our  life  attract  bim. 

-But  not  one  Latin  American  in  ten  tbousand  bas 
ever  been  to  tbe  United  States,  and  perbaps  only  one 
in  a  bundred  bas  beard  mucb  about  us.  It  is  good 
Latin  American  politics  to  picture  us  as  tbe  "Yankee 
peril."  So  tbe  Latin  American  wbo  bas  never  been 
away  from  bome  may  admire  our  energy  and  cleverness, 
yet  at  tbe  same  time  fear  us  as  possible  aggressors. 

In  our  bearts  we  know,  of  course,  tbat  tbere  is  no 
desire  for  conquest.  We  are  tbe  friends  of  all  otber 
republics.  Haven't  we  undertaken  to  protect  our  neigb- 
bors  by  tbe  Monroe  Doctrine  ?  And  baven't  we  worked 
for  Pan- Americanism  ?  We  are  idealists,  internation- 
ally, not  Huns — big  brotbers  to  tbe  weaker  nations. 

Wbicb  all  runs  trippingly  in  Sunday  supplement  or 
movie  captions,  as  we  say  it  to  ourselves.  Tbe  trouble 
is,  bowever,  tbat  we  are  alone  in  saying  it!  Nobody 
else  says  it.  Tbe  Latin  American  is  not  keen  about 
tbe  Monroe  Doctrine — be  feels  capable  of  protecting 
bimself.  Pan- Americanism  may  appeal  to  bim,  but 
still  seems  a  long  way  in  tbe  future,  and  be  may  have 
something  entirely  different  in  mind,  sucb  as  a  strong 
alliance  between  tbe  ABC  countries  and  Europe. 


THE  CANAL  ZONE— A  SAMPLE  OF  US     279 

During  the  past  generation  we  have  freed  Cuha,  in- 
sisted on  the  open  door  in  China,  gone  into  the  world 
war  without  selfish  motives,  and  hehaved  ourselves  like 
good  little  international  hoys  in  otlier  ways.  Pre>- 
sumahly,  the  Latin  American  has  watched  all  this,  with 
applause.  Mayhe!  But  he  has  also  been  watching  us 
pick  up  odd  lots  of  territory — the  Philippines,  Porto 
Rico,  Hawaii,  the  Virgin  Islands,  the  Canal  Zone  it- 
self, and  our  cash  register  interference  with  little 
countries  like  Hayti  and  Santo  Domingo.  Not  the 
Latin  American  alone,  either.  For  at  this  writing 
people  in  the  British  West  Indies  are  all  astir  over  our 
Congressional  proposals  to  ask  John  Bull  if  he  will 
sell  the  Bermudas,  and  the  French  West  Indians  are 
agog  over  rumors  that  we  may  get  Martinique  and 
Guadaloupe  in  exchange  for  France's  debt  to  us.  If 
you  want  to  know  how  the  islanders  feel  in  this  mat- 
ter, just  imagine  a  Member  of  Parliament  moving 
that  Downing  Street  ask  Uncle  Sam  if  he  is  willing  to 
sell  your  State,  and  how  much  he  will  take  for  it! 

These  are  the  factors  the  Latin  American  has  to 
take  into  his  reckoning  before  he  begins  to  like  us,  and 
probably  he  decides  that  he  will  stop  with  admiration. 

As  an  average  American  of  your  generation,  you  feel 
innocent  of  ambitions  for  conquest,  from  Canada  to  the 
little  Brazilian  island  of  Fernando  de  Norona — a 
dandy  cable  anchorage. 

But  will  you  give  bond  that  in  the  next  two  or  three 
generations  some  new  spirit  may  not  arise,  or  a  dom- 
ineering autocrat  set  out  for  conquest  with  a  high  hand  ? 


280       BUSINESS  IN  SOUTH  AMEEICA 

Remember  what  happened  to  the  harmless,  idealistic, 
philosophic  German  of  two  generations  ago! 

^'Do  they  like  us  ?"  we  ask  wistfully,  and  forget  that 
the  Latins  know  little  about  us,  due  to  our  own  neglect. 

During  the  war  our  government  publicity  organiza- 
tion took  pains  to  cable  truthful  American  news  to  the 
press  in  some  of  the  Southern  republics.  The  news- 
papers got  it  free,  and  enemy  propaganda  was  dis- 
counted, and  in  a  little  while  the  Latin  Americans  were 
saying,  "Why,  I  didn't  know  the  Yankees  were  doing 
this  and  that !" 

But  our  publicity  centered  on  the  countries  that 
might  be  swung  to  the  Allies'  cause,  and  other  countries 
which  didn't  seem  diplomatically  important  were 
ignored. 

Just  about  the  time  this  news  was  producing  results 
in  the  major  Latin  American  republics  an  American 
engineer  dropped  into  Bogota.  This  is  the  capital  of 
Colombia,  the  South  American  republic  nearest  the 
Canal.  But  it  is  more  than  a  week's  journey  from  the 
seacoast,  and  could  not  be  expected  to  have  forgotten 
the  revolution,  inspired  or  spontaneous,  through  which 
it  lost  Panama  and  we  got  our  Canal  concession.  Our 
free  war  news  was  going  right  by  Colombia,  and  the 
l^ogota  newspapers  were  filled  with  enemy  propaganda. 

The  Colombians  began  chaffing  the  engineer. 

"You  Yankees  won't  fight !"  they  assured  him.  "You 
may  lend  the  Allies  some  money,  so  they  can  buy  more 
munitions  from  you  at  a  big  profit,  but  you're  not 
fighters.  Anyway,  you  couldn't  land  troops  in  Prance. 
Yankee  bluff!" 


THE  CA:N^AL  zone— a  sample  of  us     281 

With  other  arguments  of  the  same  sort,  all  neatly 
canned  for  them  in  Berlin,  with  not  a  line  of  informa- 
tion about  ourselves. 

^'Would  you  like  to  read  a  cablegram  I  got  from 
Washington  just  before  leaving  Panama?"  asked  the 
American,  ^^It  came  in  connection  with  our  third 
Liberty  Loan." 

He  produced  the  message,  which  stated  that  we  had 
1,500,000  soldiers  in  France,  that  they  were  holding 
their  own  front,  that  we  had  raised  $7,000,000,000  in 
two  loans,  and  were  raising  $4,000,000,000  more,  that 
we  were  sending  food  to  the  Allies,  building  ships,  and 
similar  war  facts. 

The  Colombians  were  astonished.  They  admitted 
that  they  had  heard  nothing  of  all  this,  and  saw  how 
propaganda  had  been  feeding  them  up  with  the  other 
side.  How  could  they  believe  in  us,  much  less  like  us, 
imder  the  circumstances? 

Go  to  Bogota  to-day,  and  you  will  find  a  new  spirit. 
The  Colombians  know  what  we  did  in  the  war.  They 
have  been  down  to  see  the  Canal.  Catching  the  con- 
tagion of  example,  they  are  no  longer  content  to  live 
in  isolation,  but  propose  to  connect  their  capital  with 
the  seacoast  and  the  world  by  railroad,  and  also  air- 
plane service.  We  owe  them  some  money  for  compen- 
sation. There  is  strong  sentiment  toward  letting  the 
Yankees  build  the  railroad  on  Panama  Canal  stand- 
ards. 

The  Republic  of  Panama  has  caught  the  contagion, 
too.  With  less  than  400,000  people  in  an  area  of 
nearly  30,000  square  miles,  a  good  climate  and  two- 


282       BUSmESS  m  SOUTH  AMEEICA 

thirds  of  its  area  in  public  lands  for  sale  to  settlers,  ita 
chief  handicap  in  development  is  lack  of  transporta- 
tion. Panama  has  only  one  railroad,  thirty-two  miles 
long — the  Panama  Railroad  following  the  Canal  be- 
longs to  Uncle  Sam.  But  it  has  a  wonderful  stretch 
of  seacoast  both  sides,  and  modem  trunk  highways 
through  the  fertile  coast  plateaus.  It  would  be  easy, 
with  lateral  roads,  to  send  soil  products  to  market  by 
water.  A  system  of  highways  has  now  been  plaoned  to 
open  up  territory  north  of  Panama  City,  along  the 
Pacific  coast — 250  miles  of  cement  asphalt-carpeted 
road,  with  100  miles  of  lateral  feeders,  a  $10,000,000 
job  which  would  give  motor  truck  transportation  to  a 
new  farming  area  large  enough  to  feed  the  republic 
(which  now  imports  much  of  its  food)  and  the  Zone 
population,  and  yield  additional  products  for  export. 

Panama's  interest  in  roads  is  keen  just  now  because 
she  finds  herself  with  more  than  1,000,000,000  Balboas 
in  the  treasury,  equal  to  $1,000,000,  an  unexpected 
windfall.  It  never  happened  before  in  her  short  hisr 
tory,  and  is  due  to  Zone  influence,  along  with  her  own 
good  sense. 

The  finances  of  the  republic  were  being  handled  on 
a  system  that  involved  duplication  in  the  collecting 
and  spending  of  money.  These  methods  were  loose 
and  costly,  and  each  year  showed  a  deficit.  In  1918 
the  Panamanian  Congress  authorized  the  President  to 
appoint  a  fiscal  agent,  stipulating  that  one  be  secured 
from  the  United  States.  Uncle  Sam  took  a  discreet 
young  fiscal  agent  off  the  job  in  Hayti  and  sent  him  to 
the  Panamanians.    What  he  has  actually  done  he  will 


THE  CANAL  ZONE— A  SAMPLE  OF  US    283 

not  saj,  because  his  position  is  advisory,  and  nothing 
more.  But  by  systematization,  and  the  use  of  the  cash 
register,  he  has  been  able  to  show  the  Pancimanians  how 
to  roll  up  a  million-dollar  surplus  in  a  little  more  than 
one  year,  and  now  the  latter  want  to  invest  the  money 
in  a  solid  road  scheme  for  the  further  good  of  their 
country. 

Up  and  down  the  coast  the  republics  are  responding 
to  the  Canal's  influence,  and  planning  on  Zone  lines. 
Ecuador  is  finally  cleaning  up  Guayaquil,  long  the 
deadliest  plague  spot  in  South  America,  with  super- 
vision from  the  Canal  sanitary  organization.  Peru  is 
planning  to  open  up  her  rich  Amazon  hinterland,  link- 
ing it  by  transportations  to  the  Canal.  Chile  is  plan- 
ning to  extend  her  railroad  system  for  long-haul 
traffic,  and  link  it  to  an  enlarged  merchant  marine — 
it  is  usually  news  to  most  Americans  that  much  of  the 
freight  and  passenger  traffic  along  the  West  Coast  is 
carried  by  Chilean  and  Peruvian  ships,  both  countries 
fostering  their  merchant  marine.  The  Central  Ameri- 
can republics  plan  new  developments  in  their  western 
provinces,  hitherto  under  market  handicaps.  And  even 
countries  on  the  East  Coast  of  the  Southern  continent 
are  alert  to  possibilities  for  shipping  the  products  of 
their  western  reerfons  throucrh  the  Canal. 

To  grow  more  wool  and  beef,  coffee  and  cocoanuts; 
to  mine  more  copper  and  nitrate;  to  build  more  rail- 
roads, and  better,  and  supplement  them  with  motor 
truck  highways;  to  increase  output,  and  trade,  and 
utilize  the  new  opportunities  created  for  them  by  the 
Canal — this  is  the  immediate  task.     Latin  America  is 


284:       BUSIISTESS  IK  SOUTH  AMERICA 

alive  to  it.  Every  Latin  American  who  passes  tlirougli 
the  Canal  Zone  goes  back  home  enthusiastic  about  doing 
things  in  the  big-scale  way. 

But  there  is  something  more  in  the  Zone  for  the 
Southern  countries. 

General  Gorgas  once  said  that  if  he  were  sent  to 
clean  up  an  old  plague  spot,  and  had  to  choose  a  single 
sanitary  measure  among  all  the  others,  he  would  select 
that  of  doubling  wages.  For  experience  had  taught 
him  that  poverty  is  the  greatest  single  cause  of  bad 
sanitation.  Double  wages,  and  people  do  many  things 
for  themselves. 

Latin  America  has  a  good  many  shortcomings  that 
could  probably  be  eliminated  by  doubling  wages. 
Outside  of  the  largest  cities,  the  sanitation  and  health 
standards  are  very  low.  Education  is  free  in  most  of 
the  countries — constitutionally.  But  there  are  few 
schools  and  much  illiteracy.  The  baUot  is  restricted  in 
mofit  of  the  countries,  with  government  by  cliques  on 
the  old  Spanish  plan.  With  millions  of  acres  of  land, 
and  an  ardently  expressed  desire  for  settlers,  most  of 
the  Southern  republics  grow  in  population  hardly  at 
all,  because  land  is  held  in  large  estates,  with  land- 
owners dominant  in  government.  Living  conditions, 
like  earning  capacity,  are  on  a  low  scale,  and  mortality 
high. 

These  things  are  not  so  much  a  fault  as  an  in- 
heritance. Held  back  two  centuries  by  Spain  and  Por- 
tugal, Latin  America  got  a  late  start  in  self-government. 
Its  governments  are  still  full  of  indirections,  such  as 
heavy  tariff  duties  and  negligible  land  taxes,  the  build- 


THE  CAXAL  ZONE— A  SAMPLE  OF  US    285 

ing  Tip  of  top-heavy  mamifacturing  industries  to  tho 
neglect  of  agricultural  development,  the  borrowing  of 
foreign  capital  for  railroads  and  public  improvements 
instead  of  home  thrift  and  investment,  and  so  on. 

To  the  Yankee  visitor  it  seems  as  though  Latin 
America  needs,  first  of  all,  higher  earning  capacity  and 
a  big-scale  scheme  of  development.  It  has  been 
tinkering  along  several  generations  on  the  European 
scheme,  adapted  to  small,  crowded  countries.  Latin 
America  being  continental,  has  not  got  very  far  with 
provincial  methods.  Our  scheme  is  truly  continental. 
We  know  that  if  you  want  enough  of  anything  when 
you  are  developing  a  continent,  you  must  plan  for  too 
much. 

In  the  Canal  and  the  Zone  we  have  displayed  our 
samples,  handy  for  Latin  American  inspection.  Latin 
America  is  becoming  more  and  more  interested.  It 
will  look  more  and  more  to  us  for  suggestions  and  help 
not  because  we  are  idealistic,  or  altruistic,  or  beautiful, 
but  simply  because  we  have  the  experience  and  the 
goods.  It  wants  the  things  for  which  it  admires  us. 
Liking  us  is  something  that  needs  better  acquaintance 
on  both  sides. 


/ 


THE    END 


INDEX 


ABC  countries,  27,  278 
Advertising,  113-126,  233 
agencies,    absence    of    and 

substitut-es  for,  123 
American   backwardness   in 

South  America,  113-116 
American    methods    needed 

on  Southern  Continent,  9 
American  methods  part   of 

American  industry,  120 
appeals,  124,  125 
copy,  suggestions  for,  121 
duties  on,  233,  234 
matter,  duties  on,  132,  133 
mediums,  114,  121 
novelties,     appreciated     by 

dealers,  99 
pictures,  blunders  in,  123 
principles      and      methods, 

113-116 
room      for      improvement, 

111 
successful  copy  plan  of  one 

American        corporation, 

122 
themes    in    South    America 

and  at  home,  117,  118 
used      in      buying      Latin 

American   products,   191, 

192 
Agricultural  implements,  need 

for  special,  157 
Agriculture,  opportunities  re- 
stricted, 88 
primitive   nature   of   South 

American,  33,  34 


Agriculture,  South  American 

characteristics,  239-240 
"American,"  when  an  Ameri- 
can is  not,  14i 
American      advertising      skill 

admired,  115 
financial       supervision      in 

Panama,  282,  283 
methods,    needed   in    South 

American  distribution,  93 
methods.     South    American 

interest  in,  103 
misconceptions  of  Southern 

Continent,  183-185 
news    in     South     America, 

176-179 
Americans,   misrepresentative, 

220,  221 
what       South       Americans 

think  of,  175-186 
who  prefer  Latin  countries, 

216 
Amazon    "basin"    region,    25, 

26 
Indians  and  negroes,  26 
products,  27 
rubber  industry,  190 
Andes,    a    growing    mountain 

system,  21,  22 
Army  of  the,  253,  254 
highest    Indian    civilization 

developed  along,  23 
San  Martin's  cowboy  army 

of,  29 
San    Martin's    passage    of, 

254 


287 


288 


INDEX 


Animals,  lack  of  domestic  be- 
fore white  conquest,  22 
prehistoric  South  American, 
22 
Annexation,  fear  of,  in  Latin 

America,  279,  280 
Appearance,   Latin  American 

pride  in,  120 
Araucanian  Indians,  259,  260 
Arco- Verde,  Brazilian  Indian 

chief,  266 
Argentina,    British   efforts  to 
conquer,  165 
Declaration    of    Independ- 
ence, 262 
great  size  of,  17 
history,  254 
larger     than     Mexico     and 

Central  America,  20 
railroad  difficulties,  149-152 
Argentino,  the,  as  a  spender, 

103,  104 
Artigas,  Jose,  29,  252-254 
biography  of,  256,  257 
"Asencio,  Grito  de,"  256 
Attorney,  power  of,  224-227 
ower     of,     what     should 
be     included     in,      227- 
232 
Automobile,  15,  16,  115,  246 
American,    sales    in    South 

America,  14 
European,  119 
sales  by  creating  good  road 

sentiment,  119 
salesman's    policy    for    de- 
veloping territory,  15,  16 
tires,  156,  157,  190 
Ayacucho,  battle  of,  262 


Baggage,  rough  handling,  234 
Balloon,  Brazilian's  invention 
of,  267 


Bank,  branch  system,  66 
employees,  216 
work,      opportunities      for 

Americans  abroad,  68 
Banking,  British  skill  in,  166- 

168 
business  different  in  South 

America,  64-68 
information      service      for 

South  Americans,  132 
Latin     American     methods 

largely  European,  67 
Banks,  American  branch,  have 

information  service,  58 
American,  use  in  traveling, 

230,  231 
as   sources   of  information, 

95 
commercial        departments, 

58-60 
deposits        in        American 

branch  by  South  Ameri- 
cans, 65,  66 
different    organization    for 

world  trade,  62-64 
gather    credit    information, 

57 
need  for  our  own,  54-68 
prejudice  against  our  own, 

61,  62 
service  in  traveling,  237 
teamwork     in     advertising, 

123,  124 
thrift      demonstration      by 

American  branch,  84 
without     branches     abroad, 

64 
Baldwin    Locomotive    Works, 

197 
Barter    principle    needed    in 

world  trade,  197,  198 
"Basin"  and  "rim"  countries, 

23-28 
Beef,  188 


IOT3EX 


289 


Beef,    chilled,    raxely    obtain- 
able  in    South   American 
cities,  194,  195 
trade  in,  24 
Beef  extract,  24 
Belgrano,   Manuel,   biogi'aphy 

of,  201,  262 
Bello,  Andres,  252 
Beltran,      Fray      Luis,     253, 

254 
Book  stores,  English,  in  South 

America,  102 
Books,  American,  dealing  with 
South  America,  184 
American,  few  sold  in  South 

America,  182 
needed    in    South    America 

tour,  235 
Pan-American,  plan  for  cir- 
culation, 182,  183 
small  circulation  of,   South 
American,  181-183 
Bolivar,    Simon    de,    29,   250, 
251,  252,  254 
biography     of,     255,     256, 
262 
Bolivia,     first     president     of, 
262 
the  mountain  republic,  28 
Bonds,  American  investors  do 
not  know  Southern  Con- 
tinent, 85 
putting     South     American 
issues  on   level  with  our 
own,  86 
South  American,  one  form 
of  investment,  84 
Brazil,  17 

cattle  industry,  24 
distributing      methods      in 

southern  states  of,  92 
first    silo    erected    in,    246, 

247 
history  of,  263-268 


Brazil,    larger    than    United 

States,  1 
mixtures  of  blood,  44 
opened  to  trade,  29 
peculiarities  of  trade,  196 
railroad      difficulties,      148- 

153 
rubber,  190 
size  of,  20 
three      separate      countries 

originally,  264-260 
two  countries  from  business 

standpoint,  27 
wild  products,  34 
Brazilian  law,  225-227 
republic  proclaimed,  264 
tolerance,  212 
Breakfast,     going     home     to 

noon,  98 
British,   adaptation   to   South 

American  methods,  92 
conservatism    in    retailing, 

107,  108 
conservatism    in    language, 

200,  201 
enterprise     in     developing 

plantation    rubber,    189, 

190 
homely  motto,  16 
influence,  102 
investments    in    Argentina, 

82 
moving  pictures,  180 
philosophy  of  business,  170, 

171 
prestige  in  South  America, 

166,  167 
solidity  and  financial  skill, 

163-168 
volunteers       from       South 

America,  168 
what  South  Americans  ex- 
pect from,  118 
Brown,  Admiral,  256,  257 


290 


mDEX 


Buenos     Aires     and     Lima, 
founded  nearly  100  years 
before  Pilgrims,  33 
Buenos    Aires,    savings    cam- 
paign in,  84 
Building,  American  ideas  ap- 
preciated, 119 
materials,      American,      in 
Lima  opera  house,  12 
Bull  fighting,  101 
Business,     best     relationship 
with  South  America,  15 
handicaps  in   South  Amer- 
ica, 127-130 
need  for  balance,  187-198 
Business     cards,     kind     used 
in    South    America,    235, 
236 
Business       men,       American, 
needed  to  study  countries, 
87 
executive,  in  South  Amer- 
ica, 206,  207 
Business    methods,    82,    127- 
147 
differ  in  each  country,  21 
information  about,  in  United 
States,  94-86 
Business  skill.   South  Ameri- 
cans, 129 
Business  woman,  an  American 
in  Rio  de  Janeiro,  97,  98 
Buying,   importance   of,   187- 
198 
opportunities   for   creative, 

112 
Peruvian  cotton,  192 

Cables,  237 

efforts  to  establish  Ameri- 
can service,  169 
Cabral,  Captain  Pedro,  265 
Cacao,  190,  191 
Camarao,  267 


Canada,  compared  with  South 

America,  20 
Canal  Zone,  as  object  lesson 
to  South  Americans,  269- 
285 
Capital,  41 
lack  of,  68 
South      America      "capital 

poor,"  55 
South    American    view    of 
foreign,  81,  82 
Cash  before  shipping,  injus- 
tice of  demand  for,  130, 
131 
Catalogues,   care   in  mailing, 

134,  135 
Cattle,    Brazil's    undeveloped 
region,  1 
industry,  developing  in  Bra- 
zil and  Paraguay,  24 
wild  herds,  23-45 
Caupolican,  Araucanian  war- 
rior, 259,  260 
Caupolican       and      Lautero, 
Chilean    Indian    military 
^  leaders,  45,  259-260 
Ceara,  settlement   and  enter- 
prise, 44,  45 
Central      America,      commer- 
cially      most       remote, 
94 
different  from  South  Amer- 
ica, 28,  29 
revolutions,  41 
six  little  countries  of,  28 
Chambers       of       Commerce, 
American  abroad,  100 
American,  in  South  Amer- 
ica, 95 
support  of  American,  100 
Checks,  not  yet  widely  used  in 
South  America,  66,  67 
South     American     routine, 
67 


*[NDEX 


291 


Checking  account  for  travel- 
ers, 231 
Chewing  gum,  189 
Chicle,  189 

Chile,  Araucanian  Indian  tinc- 
ture, 45 
continental     conception     of 

her  railroading,  153 
flag  of,  2G0 
has  ample  rainfall,  26 
independence  won,  254 
language  academy  in,  204 
only  revolution  since  inde- 
pendence, 84 
products,  26 
railroad     difficulties,     149- 

153 
story  of  financial  honor,  84 
Chilean  language,  204 
national  library,  181 
Chileans,     the     Yankees     of 

South  America,  45 
Chocolate,  190,  191 
Climate,  22S,  229,  246 
rainless  West  Coast,  26 
temperate       character       of 
South  American,  25 
Clothing,     American     ready- 
made,    needed    in    South 
America,  228,  229 
interest  in  our  ready-made, 

120 
room    for    improvement    in 
South      American,     105, 
106 
Cochrane,    Admiral    Thomas, 
251,  254 
biography  of,  258,  259 
Coffee,  196 

commission    on    our    trade, 

59 
our  largest  single  purchase, 

193 
planting  system,  34 


Coffee,    San    Francisco's   im- 
ports, 191,  192 
Colombia,    land    of    emeralds, 

28 
Color,  43 
among  South  American  peo- 
ple, 20 
line,  44 

prejudice,  44-46 
South     American     mixture 

promises  energy,  46 
white  skins  a  recent  fashion, 
46 
Comfort,  37,  275 
American,      in      Argentina, 

245 
appreciation     of     Yankee, 
119 
Competition,   hard   words    on 
the  firing  line,  164,  165, 
169 
Competitor,    our    greatest    in 

world  trade,  107 
Competitors,  69,  70,  73,  160, 

174,  177 
Community    spirit,    lack    of 

local,  35 
Computing    scales,    introduc- 
tion of,  lis,  119 
Conservatism  of  South  Ameri- 
cans, 129 
Continental      methods,      why 
South      America     needs, 
148,  159 
Contracts,  53 

salesmen      should      always 
make        before        going 
abroad,  15 
Com  beef,  Paraguayan,  188 
Corporations,  large  American 
concerns  can  finance  their 
own  exports,  10 
most  skillful  in  world  trade, 
13 


292 


II^DEX 


Correspondence,  advantage  of 
knowing     Spanish,     209, 
210 
Cost  of  South  American  tour, 

230 
Cotton,    mill,    American,    di- 
rect    buying     in     Peru, 
192 
rough  Peruvian,  192 
Counter    displays    in    South 

America,  97 
Country     store     organization 

for  trade,  91-93 
Courtesy,  difference  of  South 
and      North      American 
viewpoint,  141,  142 
Latin  American,  32,  39-41, 
127,  136,   147,   207,  208, 
233 
Courtesies,  overlooking  the,160 
Credit  information,  57,  131 
letter  of,  229-231 
terms,     liberal     policy     of 
American     piano     house, 
131 
Cruz,     Senor     Carlos     Silva, 

181,  182 
Cuba,  28 

big  paint  customer,  2 
Cubans   in   our   world   trade, 

200 
Culture,  South  American,  32, 

33,  51,  176 
Customs      "despechante"      or 
broker,  133 
difficulties  of  South  Ameri- 
cans, 133 
duties  on  samples  and  ad- 
vertising, prepaying,  135, 
231,  232 
duties  on  typewriter,  236 
duties,  paid  in  cash,  67 
parcel    post    complications, 
134,  135 


Customs,  regulations,  52 
tedious  routine,  128 


Danger,  economic,  ahead  for 
South  American  coun- 
tries, 42 

Darwin,  his  theory  of  South 
American  isolation,  22 
"Voyage    of    the  Beagle" 
30 

Dealer  helps  in  South  Ameri- 
can  distribution,  96-100 

Democracy,  South  American, 
37-39 

Demonstration,  selling  the 
man  behind  the  counter, 
96 

Department    stores,    90,    92, 
107,  109 
British  in   South  America, 

102 
opportunities  for  American, 
104 

Dias,  Henrique,  Brazilian  ne- 
gro captain,  267 

Disappointment,  215-2'.  V 

Distance,   astonishes   "i  t^nkees 
in  South  America,  20 
factor    in    traveling,    236, 

237 
handicaps    of,    21,    76-78, 

127-130,  136 
shortened    between    Ameri- 
can    manufa^cturer     and 
South      American      mer- 
chant, 99,  100 

Distribution,  90,  100 

difficulties     of     improving, 

112 
outlets  for  goods  come  first, 
116 

Documents,  legal,  224-227 

Dollar,  the  American,  export- 


IKDEX 


293 


ing  to  South  America,  84- 

89 
Dom  Joao  Y,  of  Portugal,  267 
Dom   Joao   ^r[,  of   Portugal, 

263 
Dom  Pedro  I,  of  Brazil,  263, 

264 
Dom   Pedro   II,    Emperor   of 

Brazil,  29,  263,  264 
"Don'ts,"  thirty,  about  Latin 

American  trade,   145-147 
Drafts,  adjusting  to  exchange 

fluctuations,  64,  65 
routine  of,  61-63 

Earning  power,  increase 
needed  in  Latin  America, 
284,  285 

East  Coast  freight  conditions, 
75 

Economic  unrest  in  South 
America,  42 

Ecuador,  the  land  of  vol- 
canoes, 19,  28 

Education,  backwardness  in 
South  America,  33,  36 

"Education"  needed  most  by 
ourselves,  16 

Eggs,  opportunity  for  recip- 
rocal trade,  195 

Elevators,  American,  156 

"El  Supremo,"  184,  185 

"Emerald  Chaser,"  the,  268 

Emeralds,  264 

Engineering,  52 

English,     being     studied     in 
South  America,  52 
can  be  used  for  legal  docu- 
ments, 226 
fashions     and     sports     on 
Southern  Continent,  101 

Enterprise,  American,  in  es- 
tablishing branch  banks, 
55 


Ercilla,    Alonzo    de,    Chilean 

author,  260 
Exchange,  British  advantages 
in  adverse  balance,  167 
effect  on  export  and  import 

business,  64,  65 
financial,    56,    57,   59,    230, 

231 
London    market    for    bills, 

167,  168 
odd  result  in  bank  routine, 

64,  65 
speculation  in,  61,  137 
Executives,    American    should 
visit  South  America,  221 
Exile     of     South     American 

patriots,  254 
Export   houses,   indispensable 
for  smaller  markets,  10 
large    concerns    in    United 

States,  94,  95 
mushroom,  11 

solidity    of    old    American, 
129, 130 
Export,      opportunities      for 
American         ready-made 
garments,  105,  106 
opportunities  for  New  Eng- 
land   and    Middle    West, 
106,  107 
Exporting,  mistake  to  think  it 

easy,  11 
Exports,   a   matter   of  neces- 
sity, not  choice,  14 
American     farm     products, 

248,  249 
American,  to  South  Amer- 
ica, 6 
must  be  financed,  55 
only    part    of    our    world 

trade,  5 
our  bulky,  195 
our  one-sided  views  about, 
187-198 


294 


IKDEX 


Exports,    to    sell    more,    we 
must  lend  more,  86 
two      general      classes      of 
American,  117, 118 

Exposition,  retail  stores  as 
permanent,  108 

Express  companies,  American 
service  in  handling"  cata- 
logues and  samples,  135, 
231,  232 
American,  service  in  travel- 
ing, 231 
service  needed  in  world 
trade,  76,  77 

"Extension  shop,"  as  a  factor 
in  Latin  American  trade, 
110 

European  ideas,  often  inade- 
quate for  South  America, 
148-153 

European  influence  through 
news  and  books,  177-182 


Family,  as  a  South  American 

institution,    50,    51,    83, 

109 
Farmer,  American  and  South 

American  contrasted,  239- 

242 
South  American,  239-249 
Farm     products,     American, 

market  for,  248,  249 
American,   ships  needed  to 

sell  abroad,  69,  70 
our  sales  to  South  America, 

14 
Fastidiousness   of   the   South 

American,  141 
Federal  Reserve  System,  com- 
pared  with    London   bill 

market,  167,  168 
Finance,  advantages  in  using 

American  banks,  60-62 


Finance,    American    "trusts" 
have    money    for    world 
trade,  13 
business   done  with   expen- 
sive capital,  99 
chief     difficulty    in     South 
American  community  de- 
velopment, 36 
difficulty    in    improvement, 

37,  38 
government,     in     Panama, 

282,  283 
loss  through  inflexible  docu- 
ments, 130 
romance  no  basis  for  South 
American  investment,  84 
South      America      "capital 

poor,"  55 
unwise      South      American 
borrowing  in  past,  83,  84 
Fines  by  customs  officials,  133 
Five-and-ten-eent    stores,    op- 
portunities for  American, 
104,  112 
Flour,  193 

"Foreign  exploitation,"  82 
Foreign  export  houses,  12 
Foreign  shipping  tactics,  71, 

72 
France,      fourth      in      Latin 
American  business,  172 
South  America's  intellectual 
godmother,  51 
Francia,  Jose  Rodridguez  de, 
257 
biography  of,  262,  263 
Free    land,    little    in    South 

America,  241,  242 
Freight,  "blind  alley"  condi- 
tions, 75 
European  equipment,  not 
adequate  for  South 
American  traffic,  150-152, 
153 


INDEX 


295 


Freight,     more     fine     cargo 

needed,  73,  74 
peculiarities       of,       South 

American,  74,  75 
rates  depend  on  teamwork, 

73-78 
French      culture     in      South 

x\raerica,  101 
French,       South       America's 

other  language,  52,  102 
Friendship  and  personality  in 

Latin-American  business, 

67,  68,  128,  129 
Fruit,    American,    opportuni- 
ties for,  248,  249 
Fruit   and    vegetables,    South 

America's  need  for  better 

distribution    and    export 

facilities,  151 

Garment  trade,  opportunities 

for,  105,  106 
Gaucho,  Argentino   and  Uru- 
guayan, 30,  34,  45 
Geography,   South   American, 
17-30, 148,  228,  229 
knowledge  of,  needed  in  in- 
vestment, 85 
Geology,  South  American,  21- 

27 
German,  cameras  vs.  Ameri- 
can, 96 
control  of  Peruvian  cotton, 

192 
enterprise  during  and  after 

the  war,  162,  163 
influence,  178 

organization  in  Latin  Amer- 
ica still  strong,  171,  172 
selling  helps,  97 
Germans,  what  South  Ameri- 
cans expect  from,  118 
Germany,  adaptation  to  South 
American  methods,  92 


Germany,  razor  trade  in 
Argentina,  8 

Goethals,  General,  270 

Good  will,  based  on  acquaint- 
ance, 185,  186 

Gorgas,  General,  284 

Government  experts  and  com- 
missions, 10,  11 

Grain  handling,  American 
methods  needed,  152 

"Grito  de  Asencio,"  256 

Grocer,  selling  the  retail,  97 

Gusmao,  Bartholcmeu  de,  the 
"Flying  Priest,"  267 

Hayti    and    Santo    Domingo 

really  African,  not  Latin, 

28 
History,  South  American,  29, 

30,  33,  42,  49,  50,  102, 

250,  268 
John  Bull's  part  in  South 

American,  165,  166 
Hogs,  American  development 

of    export    market,    187, 

188 
Horses,  wild  herds,  23 
Hotel  life,  American,  appeal 

to  South  Americans,  275 
Hotels,  absence  of  comfort  in 

South  America,  274 
South  American,  room  for 

improvement,  108 
"Howlers"  in  South  American 

geography,  17-21 
Humor,   sense  of,   needed   in 

South  America,  217 

Identity,  proving  one's  legal, 

223-227 
Imagination,  needed  in  export 

trade,  1-16,  31 
Immigrants  in  South  America, 

33,  35,  241,  242 


296^ 


IISTDEX 


Implements,  farm,  needed  in 

South  America,  247,  248 
Importer,  a  hard-headed  real- 
ist, 7 
teamwork  advertising  with 
the,  116,  117 
Import    organization,    ramifi- 
cations of,  90-94 
Imports,    importance    of,    in 
world  trade,  187-198 
necessary   to    pay   for   ex- 
ports, 6 
part  of  export  trade,  35 
we  buy   more   from   South 
America  than  we  sell,  6 
Incas,     descendants     of,     in 
Peru,   Ecuador  and  Bo- 
livia, 25,  26 
limited  resources  of,  23 
Income  tax,  complications  in 

traveling,  238 
Independence,  Brazilian,  263, 
264 
Declaration   of,   Argentina, 

262 
South  American,  251-268 
Indian  blood  in  Central  Amer- 
ica, 45 
in  South  America,  25-44 
Indian    military    leaders    in 
Chile,  45 
population   largest   in   Bo- 
livia, Peru  and  Ecuador, 
45 
wives    of    first    settlers    in 

Brazil,  266 
words  in  Portuguese,  212 
Indians,  Araueanian  in  Chile, 
26 
mistake  to  think  of  South 

Americans  as,  43 
range  from  wild  to  Parisian 

education,  44 
South  American,  22 


Indians,    two-thirds    popula- 
tion Peru  and  Bolivia,  34 
Influence  of  Panama  Canal  in 

Latin  America,  269-285 
Information,   confidential,   57, 

58 
giving    exact    details,    127, 

128 
lack    of,    about    ourselves, 

178 
moving  picture,  179,  180 
needed  by  South  Americans 

as  well  as  ourselves,  131, 

132 
Pan-American,     plan     for 

circulation,  182,  183 
service  by  American  branch 

banks,  58 
South    American,    available 

in  United  States,  94-96 
South  American,  needed  by 

travelers,  223-238 
technical    data    about    our 

products    often    lacking, 

158,  159 
Interpreters,    40,    200,    207- 

209 
Investment,   working   directly 

with  capital,  87 
Investments    abroad,    earning 

power  of,  79,  80 
Investments,      American,      in 

South  America,  79-89 
British,  in  Argentina,  82 
British,  in  Latin  America, 

79,  80 
direct  business  value  of,  87 
largest  American  on  South- 
em  Continent,  187 
Mexico,  41 
new  view  of,  83 
South    American    view    of 

foreign,  81,  82 
the  other  side  of,  80,  81 


INDEX 


297 


Investments,    tied     up     with 
buying,  193,  194 
to  sell  more  we  must  lend 

more,  86 
two  distinct  angles,  79 

Iquitos,    Peru's   Atlantic   sea- 
port, 21 

Isabel,    Princess,    of    Brazil, 
264 

Island    republics,    the    three, 
28 

Italy's    advantages    in    Latin 
America,  172 

Ituzaingo,  battle  of,  257 

Jamaica,  199 

Japan's      efforts      in      South 

America,  173,  174 
Job,   place   to   find   a   South 

American,  214 
Journalistic  attacks  on  United 

States,  180,  181 
Junin,  battle  of,  262 

Kipling,    "howler"    in    Uru- 
guayan fauna,  18 

"La       Araueana,"       Chilean 

epoch,  260 
Labor  troubles,  42 
Land,    controlled    by    upper 
classes,  35 
lack  of  local  taxation  and 

community  spirit,  35 
renting  system,  33 
Land  owners,  South  America, 

37,  241,  242 
Language,  another  needed  by 
South      Americans      for 
education,  101,  102 
chief     difficulties     here    at 

home,  200,  202 
English    in     Panama     and 
Porto  Rico,  277 


Language,   Latin   speech   not 
all  flowers,  127,  128 
needed   for   public   opinion 

as  well  as  business,  206 
not  an  obstacle,  93 
"picking  up"   the   Spanish, 

199-212 
Portuguese,     characteristics 

of,  211,  212 
possibilities  for  blundering, 

122,  123 
value  of  local  translations, 

121,  123 
Yankees       familiar       with 
Spanish,  199,  200 
Latin    America,    larger    than 
United    States   and    Can- 
ada, 20 
Latin-American  "color,"  270 
271 
courtesy,  39-41 
feelins:     toward     Yankees, 

277-281 
races     possess    more    than 
one-fourth     earth's     sur- 
face, 47 
roots,  many  in  English,  210 
Latin    Americans,    coming   to 

United  States,  278 
Lautero       and       Caupolican, 
Chilean    Indian    military 
leaders,  45 
Lautero,  Araucanian  military 

genius,  260 
Lavalleja,   Colonel  Juan  An- 
tonia,  251 
biography  of,  257 
Lead   pencil,   clever  introduc- 
tion of,  123 
Legal  Nobody,  the,  3,  224-226 
Leme,     Fernando     Dias,     the 

"Emerald  Chaser,"  268 
Letter   of   credit,    advantages 
of  American,  61 


298 


IOT)EX 


Lima  and  Buenos  Aires 
founded  nearly  100  years 
before  Pilgi'ims,  33 
Lima  and  Quito,  only  South 
American  cities  west  of 
New  York,  19 

Literature,    Latin  -  American 
problem,  181-183 
South  American,  51,  52 

Locomotive  Works,  Baldwin, 
197 

Lough,  William  H.,  classifica- 
tion of  South  America, 
24 

Luquiens,  Professor  Freder- 
ick B.,  205,  206 


Machinery,  difference  between 
European   and   our  own, 
158 
South    Americans'    lack   of 
experience  with,  154-157 

Madeira-Mamore  railroad,  26 

Mail,  arrangements  for,  while 
traveling,  236,  237 

"Mariana"  not  all  in  South 
America,  136 

Manners,  philosophy  of,  in 
South  America,  39-41 

Manufacturers,  not  always  di- 
rect exporters,  9,  10 

Maranhao,  Lorrenco  de  Albu- 
querque, Brazil's  first 
general,  266 

Markets  for  manufacturers, 
244 

Materials,  raw,  our  industries 
use  Latin  American,  189- 
191 

Meat,  large  American  invest- 
ments in,  86 
packing,  13,  187,  188,  193- 
195 


Meat,   South  American  local 
peculiarities,   194,   195 
specialties,  194 
Meeting  places,  South  Amer- 
ica lacks,  108,  109 
^^Memory    pegs"    for    South 
American  countries,  27-29 
Mendoza,  city  of,  253,  254 
Mercantile       houses,        large 
American  investments  in, 
86 
methods,  90,  100 
Merchandise,  diversified  char- 
acter of,  91-93 
fascination  of,  110,  111 
Merchant  Marine  act.  United 

States,  71 
Merchant   Marine,    an    indis- 
pensable   tool    in    world 
trade,  70-78 
needs    men    and   money   as 
well  as  ships,  72 
Merchants,  information  about, 
available  in  United  States, 
94-96 
Methodist,  delegate  from  Ar- 
gentina, 17 
Metric  system,  142 
Mexico,  28,  41 

Yankees  from,  200 
Middle  class,   absence   of,  ir 

South  America,  242 
Mining,    large    American    in- 
vestments in,  86 
Miranda,    Francisco    de,    29, 
252,  255 
biogTaphy  of,  260,  261 
Momsen,  Dr.  Richard  P.,  226, 

227 
Money,  arrangements  in  trav= 

eling,  229-231 
Monroe  Doctrine,  278 
Montevideo,  17 
south  of  Buenos  Aires,  21 


IKDEX 


299 


Moreno,    Mariano,    29,    252, 
254 
biography  of,  261 

Mountains,  East  Coast  range, 
22 

Movie  "fans"  in  South  Amer- 
ica, 98 

Mo\'ies,  still  in  "store  stage," 
108 

Moving    pictures,     American, 
in  South  America,  13 
information  value,  179,  180 

Munitions,  for  Army  of 
Andes,  253,  254 

Karnes,  Latin  American,  often 
puzzle  visitors,  142,  143 

Napoleon,  263,  264 

only  letter  in  English,  204 

Nationality,     doesn't     always 
govern  world  trade,  161 
each  industrial  country  has 
its  advantages,  170,  171 

Negreiros,  Andre  Vidal  de, 
Brazilian  general,  266, 
267 

Negro  blood  in  South  Amer- 
ica, 25 

Negro,  two  Latin  American 
republics  really  African, 
28 

Negroes,  freed  in  Brazil,  264 
only  three  South  American 
countries  have,  43 

"Nest  of  the  Argentine 
Eagle,"  253,  254 

News,  American  press  service 
to  South  America,  14 
anti-American,     175,     280, 
281 

Newspapers  in  Latin  Amer- 
ica, 121,  124,  176-181 

Newspapers,  reading  Spanish 
American,  204 


Nobody,  Legal,  the,  224-226 
North  Coast  "rim"  region,  25 

O'Higgins,  Ambrose,  257,  258 

O'Higgins,  Bernardo.  250, 
251,  254,  250-258 

Open  accounts,  a  convenience 
to  South  Americans,  129- 
131 

Opera  seats,  American,  story 
of  misrepresentation,  12, 
13 

Opportunities  in  South  Amer- 
ica, 213-223 

Oranges,  248 

Packages,  as  sales  helps  for 
merchants,  98,  99 
damage  through  unsuitable, 

139 
scarcity  of,  98,  99 
Packing    and    packing    cases, 
137-140 
complaints  about,  13,  14 
should      meet      customers* 
wishes,  132,  133 
Paint,  Cuba's  purchases,  2 
Panama  Canal,  17,  19 
as    an    American    achieve- 
ment, 269-285 
Chile   alive   to  possibilities 

of,  153 
opens  South  America's  back 

door,  26 
sending    Brazilian    soldiers 
through,  17 
Panama  City,  277 
Panama,   Republic  of,   enter- 
prise, 281,  282  ^ 
Pan-Americanism,  278 
Pan-American   railroads,  sev- 
eral developing,  19 
Paraguav,    a    future    Argen- 
tina;  28 


300 


INDEX 


Paraguay,  American  interest 
in  novel  about,  184,  185 
cattle  industry,  24 
meat  packing  in,  188 

Parcel  post  not  always  desir- 
able business  method, 
133-136 

Patriots,  South  American, 
251-268 

Pedro,  Dom  1,  263 

Pedro,  Dom  II,  263-264 

People,       South       American, 
backwardness     in     living 
conditions,  33-36 
South  American,  what  they 
are  like,  31 

Persistence  in  world  trade, 
16 

Personal  dignity  of  Latin 
Americans,  143 

Personality  and  friendship  in 
Latin  American  business, 
67,  68 

Peru,  19-28 

purchases   of  building  ma- 
terial for  opera  house,  12 
railroads,  149-153 
seaport  to  Atlantic,  20 
Spanish  exploitation,  23 

Philippines,  Yankees  from, 
200 

Pictures,  as  dealer  helps,  98 

Pilfering  of  goods  in  transit, 
138 

Pinzon,  264 

Pizzaro,  264 

Plata,  River,  "basin"  of,  25 

Policy,  constructive  plan 
needed  for  world  trade, 
15,  138 

Politics  and  the  South  Ameri- 
can peasant,  244 
our  lack  of  knowledge  about 
Latin  Americaji,  184 


Politics,     status     of     South 

American  countries,  37 
Population,  negro,  43 

South    America    has    two- 
thirds     that     of     United 
States  and  Canada,  20 
Porto  Rico,  277 

Yankees  from,  200 
Portugal,    small   influence   in 
South     American     trade, 
101 
Portuguese  conquest  of  Brazil, 
23 
forty    per    cent    of    South 

Americans  speak,  202 
influence  in  Brazil,  172,  173 
language,  4,  20 
language,     few    Americans 

study,  210 
more  difficult  than  Spanish, 

211 
of  the  Yankee  characteris- 
tics, 50 
the  language  of  Brazil,  20- 
27 
Positions   in   business.   South 

American,  214-219 
Postage,  how  to  handle  export 
mail  here  at  home,  135, 
136 
irritation  of  underpayment, 
135,  136 
Postal  service,  improvements 

needed,  11 
Power  of  attorney,   224-226, 
227 
what    should    be    included, 
227-232 
Premiums,      appreciated     by 

dealer,  99 
Prescott's  "Conquest  of  Peru," 

a  basic  work,  30 
Printed    matter,     duties    on, 
135,  233,  234 


INDEX 


301 


Printing,   difficulties  in   com- 
mercial, 125,  126 
Products,     South     American, 

our  purchases  of,  187-198 
Profit  marj^ins,  large  in  South 

America,  99 
opportunity     to     decrease, 

105-107 
Progress,  South  American  not 

yet  industrial,  51 
signs  of  rapid,  36 
Propaganda,    177,    178,    280, 

281 
Public     opinion,     lacking    in 

South  America,  243 
Puchero,  recipe  for,  3 
Purchases,  American,  in  Latin 

America,  191 
Purchasing  agent,  province  in 

world  trade,  197,  198 
power.      South     American, 

196,  197,  244,  245 


Quito  and  Lima  only  South 
American  cities  west  of 
New  York,  19 


Races,  mixture  of,  in  Brazil, 

266 
Railroads,  52,  80,  82,  88,  272, 
273 
Chilean,  283 
difficulties   due   to   lack   of 

technical  training,  154 
few  between  South  Ameri- 
can countries,  149,  150 
European      vs.      American 
principles,  148-153 
Railroad  equipment,  197 

Madeira-Mamore,  26 
Railroading,  opportunities  for 
Americans,  153 


Raw  materials.  South  Ameri- 
can, necessary  to  our  in- 
dustry, 6 

Razors,  opportunity  in  Argen- 
tina for  American,  8 

Refrigeration    and    refrigera- 
tor cars  lacking  in  South 
America,  151,  152 
needed  on  American  ships, 
195 

Repaii-man,  problem  of  the, 
158 

Representatives,  selecting 

suitable,  218-220 

Resources,  development  of 
South  American,  198 

Retail  distribution,  90-100 
methods,  American,  oppor- 
tunities for,  104,  105 

Retailer,  French  and  British 
in  South  America,  102 

Revolution,   Chile's  only,  84 

Revolutions,    Brazilian,     263, 
264,  267,  268 
Latin  American,  32 
South  American,  251,  252 
very  few  in  South  America 
proper,  41,  42 

"Rim"  and  "basin"  countries, 
23-28 

Rio  de  Janeiro,  a  land-locked 
city,  31 
older  than  New  York,  33 

Riviera,  General  Fnictuoso, 
257 

Roads,  246,  274 
needed  for  developing  South 

America,   17,  31,  36 
Panama's  system,  282 

RodridguGZ,  Simon,  255 

Romance  of  South  America, 
4 

Roosevelt,  Colonel,  184 

Root,  Secretary,  184,  250 


302 


INDEX 


Rotary  Club  in  South  Amer- 
ica, 95,  143 

Route    for    covering     South 
America,  221-223 

Rubber,  190,  193,  196 

British      plantation,      189, 
190 

Rubber  gatherers,  26 


Sales  helps,  our  advantage  in, 
97-100 
practical  test  by  demonstra- 
tor, 96 
quota,  wrong  basis  for  sell- 
ing, 9 
work,  the  basis  of  distribu- 
tion, 116 
Salesmen,  American  speaking 
Spanish,  209 
little  opportunity  for  spe- 
cialty, 128 
taxes  on,  231 
Sal-soda,    creating    a   market 

for,  97 
S ample;  the  Canal  Zone  as  a, 

269-285 
Samples,       appreciated      by 
dealer,  99 
customs   house   regulations, 

231,  232 
Latin-American  philosophy 

of,  232,  233 
may  involve  difficulties,  134, 

135 
not  a  substitute  for  connec- 
tions, 116 
substitutes  for,  233 
San    Francisco,    imports    of 

coffee,  191 
Sanitation,  36 
American,  in  Ecuador,  283 
American,  in  Panama  Canal 
Zone,  275,  276 


San   Martin,    Jose,    29,    250- 
251 
biography  of,  252-254,  256, 
258 
Santiago  de  Chile,  older  than 

New  York,  33 
Santo    Domingo    and    Hayti, 
really  African,  not  Latin, 
28 
Seasons,  opportunities  in  re- 
versed, 195 
Seclusion  of  South  American 

women,  109 
Selling,  respect  for  sensitive- 
ness, 50 
should  go  hand  in  hand  with 
technical    training,    155- 
159 
Sensitiveness,    South    Ameri- 
can, 129 
Service,  a  big  factor  in  world 
trade,  76-78 
more  effective  than  nation- 
ality, 161,  162 
Shipping  cases,  how  to  make 
thief  proof,  138,  139 
difficulties,  69 
documents,  58,  129 
instructions,       why       they 
should  be  followed  liter- 
ally, 132,  133 
Ships,  keeping  them  busy,  72, 
73 
need  for  our  own  delivery 
wagons   in   world    trade, 
69-78 
passenger  facilities  for  our 

customers  abroad,  70 
service  more  important  than 

ships,  77,  78 
should  be  backed  with  team- 
work, 72 
Ship  subsidies,  71 
Silos,  246,  247 


INDEX 


303 


Silos,    absence   of,   in    South 

America,  246,  247 
Slang,  Latin  American,  lends 

force  to  advertising,  122 
Slavery,  Abolition  of  Brazil- 
ian, 264 
South  America,  American  in- 
terest in,  213,  214 

compared  with  our  western 
states,  92 

cost  of  touring,  230 

faces    the    future,    not    the 
past,  47,  48 

formerly     two     continents, 
22 

its  richness  in  resources,  79 

lacks  experience  in  material 
development,  83 

national  jealousies,  24 

nations    do    little    business 
with  each  other,  24,  89 

peopled  by  Latin  Yankees, 
48-50 

population,  20 

relationship    to    our    conti- 
nent, 18,  19 

size  and  population,  19,  20 

touring,  221,  223 

what  is  needed  for  travel- 
ing, 224,  238 

what  it  is  like,  17-30,  31-53 
South     American     countries, 
what  they  are  like,  31 

farmer,  239-249 

government      often      auto- 
cratic, 37,  38 

history,  250-268 

his  real  motherland,  101 

interest   in   Panama  Canal, 
^  269-285 

living  standards,  89 

local  industries,  87 

news,    little    in    our   news- 
papers, 184 


South  American,  people,  what 
they  are  like,  31 
public  contrasted  with  our 
own,  113-116 
Spain,  is  she  declining?  46, 

47 
Spanish    influence    in    Latin 
American    business,    101, 
172 
language,  needed  for  under- 
standing as  well  as  busi- 
ness, 206 
last    stronghold    in    South 

America,  262 
not  an  easy  language,  202, 

203 
not  a  substitute  for  Portu- 
guese, 211 
"picking  up,"  199-212 
restrictions  in  South  Amer- 
ica, 251 
rule,  end  of,  29 
variations  in  South  Amer- 
ica, 204,  205 
Speculation       in       imported 

goods,  137 
"Speeding  up"  our  business  in 

South  America,  76-78 
Sports    in     South     America, 

101 
Stationery,    costly    in    South 

America,  235 
"Steamer  day,"  importance  of, 

128 
Steamship  service,  173 
best  to  West  Coast,  94 
effect      of     irregular,      on 

prices,  137 
Europe  to  South  America, 
92 
Steamships,    return     cargoes, 
195,  196 
triangular  routing,  192,  193 
West  Coast  service,  283 


304 


INDEX 


Steel  huts,  sold  in  Argentina, 

245 
Sucre,   Antonio  Jose  de,   29, 

252-254 
biography  of,  262 
Swine,  American  development 

of    export   market,    187, 

188 


Tariff,  Brazilian,  preferences 
to  United  States,  193 
complications,  133 
on  printed  matter,  233,  234 
"Tasajo,"  188 
Taxation,  lack  of  local,  35 
on  Brazilian  potatoes,  89 
Taxes,  on  salesmen,  231 
Teachability  of  Latin  Ameri- 
cans, 155-159 
Teamwork,  100 
Tebyri§a,  266 

Technical  aid  needed  by  South 
Americans,  155-159 
books,    American,    sold    on 
Southern  Continent,  182 
knowledge,  needed  in  South 

America,  38 
opportunities      in      South 

America,  216,  217 
terms,   difficulties  of  trans- 
lation, 208,  209 
training.    South   Americans 
seek  in  United  States,  154 
Terry,  "Short  Cut  to   Span- 
ish," 205 
Theft  of  goods,  in  transit,  138 
of  goods,  practical  demon- 
stration by  a  thief,  138 
Thrift,  developing  in  Argen- 
tina, 84 
Time,  not  considered  impor- 
tant   in    Latin    America, 
118,  136 


Tipping  and  commissions,  52, 
53 

"Tiradentes,"  Brazilian  politi- 
cal martyr,  267,  268 

Tobacco,  neglect  of  trade  by 
Americans,  112 

Tools  of  trade,  54-128 

"Tooth  Puller,"  the,  Brazilian 
patriot,  268 

Touring  South  America,  best 
way  of  getting  acquaint- 
ed, 93 
roughing  it  up  country,  93, 

94 
time  needed  for,  221,  223 

Touring,  South  American  visi- 
tors in  LTnited  States, 
103-110 

Trade  Marks,  breaking  down 
aversion   to,   100 
suggestions     for     registra- 
tion, 140 
use   for   a   staple  product, 
97 

Trade  should  be  made  rather 
than  taken,  170,  171 

Translations,  legal,  224-227 

Traveling,  assistance  by 
American  banks,  59,  60 

Tropics,  Amazon  region  chief 
tropical  section,  26 
often   have    temperate    cli- 
mate, 25 
rich  undeveloped  regions  of 
Peru  and  Bolivia,  26 

Trust  control,  fear  of  and 
remedy  for,  63,  64 

"Trusts,"  56-105,  246 
American,  most  skillful  in 
world  trade,  13 

Trunk,  office,  for  traveling, 
235 

Trunks  for  South  American 
tour,  234,  235 


INDEX 


305 


Turnover  of  merchandise,  90, 

105-107,   111 
small    and    slow    in    South 

America,  99 
Typewriter,    convenience    of, 

in  traveling,  236 

United   States,  best  customer 

of  Latin  America,  7 
Uruguay,  a  sturdy  little  coun- 
try, 28-34 
not  jungle,  18 
prison  svstem,  38,  39 
"The     Purple     Land     that 
England  lost,"  165 

Valdivia,  260 

Vauclain,  Samuel,  197 

Venezuela,  an  upland  Argen- 
tina, 28 

Viewpoint,  getting  the  South 
American,  100 

Voting,  not  developed,  37 

War,    advantages   to   British, 
168,  169 
trade,  103,  129,  130,  162 
Wealth,    gi'owth    of    Argen- 
tina's, 103,  104 
West    Coast,    countries    com- 
mercially most  remote,  94 
freight  conditions,  75,  76 
port  handicaps,  69 
rainless,  228,  229 
"rim"  region,  25 
White  peoples  in  South  Amer- 
ica, 20 
"Who    was    Who"    in    South 

America,  250-268 
Window    displays    in    South 
America,  97,  98,  110,  111 
Wives,    a    factor    in    sending 
men  abroad,  219,  220 


Women,   American,  in   South 
America,  219,  220 
American,   opportunity  for 

in  South  America,  215 
Awakening  of  South  Ameri- 
can, 109 

Women's  suffrage,  39 

Women,    traveling   essentials, 
229 

Woods     and     lumber,     South 
American,  27 

World     citizens     needed     in 
world  trade,  220 

"Xarque,"  188 

Xavier,     Joaquim     Jose     da 

Silva         ("Tiradentes"), 

267,  268 

Yankee    directness,    liked    by 

South  Americans,  40,  41 
"Yankee  peril,"  the,  176,  183 
Yankee,  the  South  American, 
48-50 
without    an    appellative   in 
Latin  America,  144 
Yankees,    better    understand- 
ing of,  since  war,  1 75-186 
material  progress  admired, 

51 
new  South  American  inter- 
est in,  102,  103 
South  American  feeling  to- 
wards, 277-281 
what  South  Americans  ex- 
pect from,  118 
what      South      Americans 
think  of,  175-186 

Zahm,   Father   J.    A.,    South 
American  books,  30 
quoted,  47,  48 


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